Adjustment in the Oil Market: Structural, Cyclical or Both?

The sharp fall in the oil price has divided views about the nature of the latest oil price cycle. Some argue that the oil market has been subject to structural shocks that have created a ‘new global oil order’ and that we have entered a world of ‘low oil prices for much longer’. Others are of the view that oil prices will rise sooner than currently expected and the current price fall has many of the characteristics of previous cycles. These two views reflect the high degree of uncertainty engulfing the oil market. ….