02330cas a2200277 a 4500 AALejournalIMF011832 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475503302 1018-5941 BD-DhAAL BD-DhAAL Chauvet, Marcelle. The Future of Oil : Geology Versus Technology / Marcelle Chauvet, Jack Selody, Douglas Laxton, Michael Kumhof. Washington, D.C. : International Monetary Fund, 2012. 1 online resource (33 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students We discuss and reconcile two diametrically opposed views concerning the future of world oil production and prices. The geological view expects that physical constraints will dominate the future evolution of oil output and prices. It is supported by the fact that world oil production has plateaued since 2005 despite historically high prices, and that spare capacity has been near historic lows. The technological view of oil expects that higher oil prices must eventually have a decisive effect on oil output, by encouraging technological solutions. It is supported by the fact that high prices have, since 2003, led to upward revisions in production forecasts based on a purely geological view. We present a nonlinear econometric model of the world oil market that encompasses both views. The model performs far better than existing empirical models in forecasting oil prices and oil output out of sample. Its point forecast is for a near doubling of the real price of oil over the coming decade. The error bands are wide, and reflect sharply differing judgments on ultimately recoverable reserves, and on future price elasticities of oil demand and supply. Mode of access: Internet Kumhof, Michael. Laxton, Douglas. Selody, Jack. IMF Working Papers; Working Paper ; No. 2012/109 Full text available on IMF http://elibrary.imf.org/view/journals/001/2012/109/001.2012.issue-109-en.xml IMF e-Library