How do unanticipated discoveries of oil fields affect the oil price?

The Hotelling rule argues that the price for a nonrenewable resource adjusts to the shadow value of the resource, reflecting the remaining availability of the resource. We empirically test the Hotelling rule on the effect of unanticipated oil field discoveries. We do not find evidence for a significant adjustment of the price of crude oil to news about greater resource availability and therefore conclude that the price for crude oil does not follow the theoretically optimal price path.

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Year of publication:	2010-10
Authors:	Leinert, Lisa
Institutions:	CER-ETH Center of Economic Research, Department of Management, Technology and Economics (D-MTEC)
Subject:	Nonrenewable Resource \| Oil Price \| Exhaustible Resources \| Information Acquisition

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Extent:	application/pdf
Series:	CER-ETH Economics working paper series.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 10/140 15 pages
Classification:	Q31 - Demand and Supply ; Q41 - Demand and Supply ; G14 - Information and Market Efficiency; Event Studies
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008683345