The Simple Economics of Global Fuel Consumption: Digest Version

This paper uses data on global fuel consumption to isolate the role of fuel demand shocks in the global oil market. Oil consumption, production and prices are driven by shocks to flow demand, flow supply and storage demand. Each of these shocks has a different impact on the oil market and the broader economy. The authors propose a simple structural framework that measures the importance of each of these drivers. This framework should be useful for policy analysis and forecast scenarios.