Long-run adjustments in petroleum consumption are not only larger than short-run adjustments. They may also be motivated by entirely different price events. This analysis shows that new price peaks have both short-run and long-run consumption responses, a result that is starkly different than...

We develop a structural model of the global market for crude oil that for the first time explicitly allows for shocks to the speculative demand for oil as well as shocks to the flow demand and flow supply. The forward-looking element of the real price of oil is identified with the help of data...