The Economics of Oil and Gas (The Economics of Big Business)

My experience in the petroleum markets started in the 1970s Middle East crises and along with my college room mate who was one of the few who cornered the oil market as traders at the time. My personal trading experience is in telecom where we buy and sell capacity with an underlying technology. Petroleum, and gas, are fundamentally traders markets. The technology is well understood as may be some of the risks. However to understand this industry one must understand how prices are set by third parties. It is not a classic microeconomics situation. It is a traders world. That essential understanding is grossly missing.Second, wherever I see probabilities assigned or assumed, it tells me that this is a purely academic exercise. In reality no one a priori knows these if even they exist. Thus many of the decision trees are vacant exercises and are academic at best.Overall this is a simple introduction but in my opinion lacking in the very key elements that make this a a challenging market.

This is a very useful book, which can offer students a overview of the economic activities and principle in term of oil and gas industry.