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Thesis & Antithesis

A critical perspective on energy, international politics & current affairs

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Location: Washington, D.C.

greekdefaultwatch@gmail.com Natural gas consultant by day, blogger on the Greek economy by night. Trained as an economist and political scientist. I believe in common sense and in data, and my aim is to offer insight written in language that is clear and convincing.

29 September 2005

Oil spare capacity

In response to a comment to my “Petroshenanigans” post (20 Sept 05), I came across this graph that might help explain my argument: it plots two variables—OPEC spare capacity and oil prices—and it seems to suggest that spare capacity and oil prices move in opposite directions. My own point—that when a cartel preserves spare capacity to artificially increase prices it indirectly serves to cushion excess variation in prices—was based on this relationship.

References:
Testimony of J. Robinson West Chairman PFC Energy 9/21/05 (link)

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