Suppose the case of a country exactly self-sufficient in oil needs, no more, no less. Does that mean oil price fluctuations do not affect its exchange rates, only redistributes wealth domestically? Also, has the UK been more or less such a case when North Sea oil was streaming in rather greater quantities?
Seb
Purely from a theoretical view Seb I'd have to think
A) Unless oil was flowing at exactly the same rate as consumption the country would have surpluses and so would be trading oil, as such it the prices would have a domestic effect. or B) Alternatively as soon as they began charging market rates for their oil they would be opening themselves up to free market competition.
With the UK and the north sea unless you have a significant proportion of the whole you can't stimulate the price dramatically.
Just theorising not claiming any knowledge on the subject
Though it must be said there was quite a lot of dubious behaviour after the IPE launched, which continued for quite a few years, producers even took to increasing supply to specifically thwart some speculators, it's the sort of thing that would even make Citigroup blush.
Az.
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