Crude oil price

Because of its very strong impact on the cost-of-living price index (in the Harmonized Index of Consumer Prices [HICP], it accounts for just under 10 percent), the price of crude oil is watched particularly closely by central banks. A 50-cent increase in the price of gasoline takes $100 billion out of the pockets of U.S. consumers. According to calculations by the International Monetary Fund, a twenty percent increase in the price of oil causes a global decline in economic activity of about one percent. The increasing integration of China, Brazil and India into the global economy is increasing demand for oil and is likely to push up the price further in the long term. – On the other hand, exporting countries (especially Germany, the USA and Japan) benefit from oil price increases in that oil-exporting countries spend the increased revenues to import high-value industrial products (petrodollar recycling). On balance, therefore, Germany in particular is much less affected by increases in the oil price than the rule of thumb mentioned above would suggest. – In addition, a high oil price in Germany stimulates investments in energy-saving measures (characterized by considerable advance inputs) and in the (partly subsidized) development of environmentally friendly energy sources (geothermal energy, biogas, wind turbines, solar collectors) and energy-saving measures (better utilization of scarce energy, such as regulations on thermal insulation). – Globally, high oil prices are encouraging the drilling of deep sea fields and the extraction of oil from bituminous sandstones (oil sands). – See biofuels, crack spread, energy-inflation link, energy prices, petroleum inflation, petroleum-food
context, inflation, global, inflation compensation, purchasing power outflow, climate inflation, carbon dioxide inflation, wage, indexed, wage-price spiral, oil price, oil price shocks, petrodollar, protein inflation, ripples, commodity prices, shocks, structural, electricity price, second-round effects. – Cf. ECB Monthly Report of July 2005, pp. 14 ff. (recycling of oil revenues and its effects; import figures), Deutsche Bundesbank Monthly Report of August 2005, pp. 11 f. (high “potential for setbacks”; two-page overview pp. 12 f. with important explanations in the notes), ECB Monthly Report of October 2005, pp. 37 f. (overviews; p. 38 also gas station prices), ECB Monthly Report of January 2006, pp. 14 ff. (causes of oil price movements), ECB Monthly Report of February 2006, pp. 38 ff. (pass-through to the HICP; price elasticities; p. 41: empirical rule of thumb: 10 percent increase in oil prices leads directly to 1.5 percent increase in consumer prices), ECB Monthly Bulletin of April 2007, pp. 62 ff. (impact of petrodollar recycling on euro area exports; overviews), ECB Monthly Bulletin of July 2007, pp. 85 ff. (key data relating to oil-exporting countries; overviews), ECB Monthly Bulletin of July 2008, pp. 39 ff. (refinery margins; relationship between prices of gasoline and diesel fuel; overviews), Cf. ECB Monthly Report of September 2008, p. 19 ff. (fluctuations in the price of crude oil; role of index funds and speculators; overviews), Deutsche Bundesbank Annual Report 2008, p. 15 f. (sequence of very high and then very low crude oil prices), Deutsche Bundesbank Annual Report 2009, p. 16 f. (price of crude oil compared with other prices; overview), ECB Monthly Report of March 2010, p. 16 f. (oil market 2000-2009; overviews), ECB Monthly Bulletin of August 2010, pp. 81 ff. (detailed presentation of the importance of oil prices for the euro area economy; many overviews; forecasts), ECB Monthly Bulletin of October 2011, pp. 52 ff. (impact of commodity prices on the HICP in general and for oil in particular; overviews), Deutsche Bundesbank Annual Report 2011, p. 21 (graph of price developments since 2007 for crude oil, industrial commodities and food); ECB Monthly Bulletin of January 2012, pp. 42. et seq. (price developments since 2006; overviews); pp. 48 ff (oil prices and inflation in the euro area); ECB Monthly Bulletin of June 2012, pp. 29 ff (detailed discussion; overviews; crude oil speculative transactions; price elasticities; references), ECB Monthly Bulletin of January 2013, pp. 45 ff (burden of oil imports in the euro area, broken down by country), ECB Monthly Bulletin of May 2013, pp. 83 ff (basic principles on the reliability of oil price forecasts; overviews; references), ECB Monthly Bulletin of September 2013, pp. 13 ff (natural gas prices since 2001; many overviews, forecast), ECB Monthly Bulletin of October 2013, pp. 70 f. (fiscal aspects of consumer fuel prices; overview).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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