The
unexpected chute of oil prices during the last six months of 2014 represents
almost 50% dollar per barrel. This fact gives us again evidence about how
difficult is to forecast and to explain global oil prices. Every author seems
to be surprised about these changes in prices, after six years of constant
increase and high-level prices. Nowadays many forecast financial advisors start
to explain how low the prices will be the next six years. But one question still
remains between scholars: Why this miscomprehension about oil price fluctuation?
Why economic theory cannot find causes of oil price movements to forecast them?
The main objective of this article is to expose a theoretical analysis
about the determinants of the long-term oil price trend. The relevance of this
analysis is justified by two reasons: The first one is related to a very
significant omission made by the conventional theory of price about the
difference between relative prices and money prices (Nicholas; 2011, 2014, and
2015). The second reason is related to the peculiar condition of the global oil
industry and its price formation. Both the inclusion of relative and money
prices and the specific condition of the global oil industry have a central
importance to understand the determinants of the international oil price trend.
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