Oil prices have decreased by about 65 percent since their recent peak in June 2014 (see chart). This dramatic and largely unexpected collapse in prices has sparked intense debate over the causes and consequences. Arguably, the dynamic adjustment has changed the oil market structurally, leaving it quite different from the past. In addition, the manner in which falling oil prices affect the global economy has changed in important ways.
A broader energy perspective is therefore now needed to comprehend oil’s long-term outlook. To this end, this article briefly answers seven questions about the oil market in the global economy.
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