Bacon, RobertKojima, Masami2014-03-312014-03-312008-08https://hdl.handle.net/10986/17539Oil is important in every economy; when its prices are high and volatile, governments feel compelled to intervene. Because there can be large costs associated with such interventions, reserve banks, central planning institutions, and think tanks in industrial countries have been carrying out quantitative analyses of oil price volatility for a number of years. This report focuses on fluctuations around trends in oil prices. It examines measurements of oil price volatility and evaluates several different approaches to coping with oil price volatility: hedging, security stocks, price-smoothing schemes, and reducing dependence on oil including diversification. It does not deal with the impact of oil price volatility on countries' macroeconomic performance or with macroeconomic policy responses; these generally have more to do with coping with higher price levels than with higher volatility per se. The study examines oil price volatility largely from the point of view of consumers and does not cover the management of revenue volatility by large oil exporters.en-USCC BY 3.0 IGOADVERSE EFFECTSAPPROACHAVAILABILITYAVERAGE PRICESBALANCEBALANCE OF PAYMENTSBARRELS OF OILBEHAVIOR OF PRICESBUDGET SURPLUSBUYERCASH FLOWCOALCOMMODITIESCOMMODITYCOMMODITY PRICESCONSUMER GOODSCONSUMER PRICECONSUMER PRICE INDEXCOPYRIGHTCOST INCREASESCRUDE OILCRUDE OIL PRICEDATA AVAILABILITYDEVELOPING COUNTRIESDEVELOPING COUNTRYDIESELDISTRIBUTION OF OILDOMESTIC OILDOMESTIC PRICEDOMESTIC PRICESECONOMIC EFFECTSEFFICIENCY IMPROVEMENTEND USERSENERGY CONSERVATIONENERGY DEMANDENERGY EFFICIENCYENERGY POLICIESENERGY PRICEENERGY SOURCESEQUAL SHARESEXCHANGE RATEEXPENDITUREEXPENDITURESFINANCIAL ASSETSFISCAL POLICYFOOD PRICESFOREIGN EXCHANGEFUELFUEL PRICESFUEL TYPEFUELSFUTURE PRICEFUTURE PRICESFUTURESGASGASOLINEGASOLINE PRICESGOVERNMENT BUDGETGOVERNMENT REVENUEGRAPHICSGROSS DOMESTIC PRODUCTHYDROCARBONSHYDROPOWERINCOMEINCOME GROUPSINDIVIDUAL FIRMSINDUSTRIAL COUNTRIESINSTITUTIONINTERNATIONAL MARKETINVESTMENT DECISIONKEROSENELOCAL CURRENCIESLOCAL CURRENCYMACROECONOMIC POLICYMARGIN ACCOUNTMARKET PRICEMATERIALNATURAL GASNATURAL GAS PRICESNUCLEAR POWEROILOIL CONSUMPTIONOIL EXPORTEROIL EXPORTERSOIL MARKETSOIL PRICEOIL PRICESOIL PRODUCERSOIL PRODUCTSOIL SUPPLYOIL USEOUTPUTOUTPUTSPETROLEUMPETROLEUM EXPORTING COUNTRIESPETROLEUM GASPORTFOLIOPRICE BANDSPRICE BEHAVIORPRICE CHANGESPRICE CONTROLSPRICE FLUCTUATIONSPRICE FORECASTPRICE INCREASEPRICE INCREASESPRICE INFORMATIONPRICE LEVELPRICE LEVELSPRICE MOVEMENTSPRICE OF OILPRICE SERIESPRICE SPIKESPRICE TRENDPRICE TRENDSPRICE UNCERTAINTYPRICE VARIATIONPRICE VARIATIONSPRICE VOLATILITYPRICING POLICYPRICING STRATEGYPRIMARY ENERGYRATE OF RETURNREGULAR GASOLINERENEWABLE ENERGYRESERVE BANKSRESIDUAL FUELRESIDUAL FUEL OILRESULTRESULTSSALESALESSAVINGSSELLING PRICESELLING PRICESSMALL COUNTRIESSPOT PRICESPOT PRICESSTOCKSSUBSTITUTESSURPLUSTAXTIME PERIODTIME PERIODSVOLATILE PRICES10.1596/17539