The Oil Drum

To be honest I'm getting well outside my depth and some professional help from someone with and understanding of economics would be a god send for tying WT export land firmly to a realistic economic model.

I think I'm on the right track since its easy enough to see that priced based demand destruction with most of the market participants in denial does not accomplish much. So the mechanism for demand destruction is primarily not demand destruction via high prices. I wonder if this model is ever valid but thats a different issue. So we go with the shortage model. Now what do I do ? How do I model a shortage ?
I'm sure their is a wealth of information but as I said I really need some help from someone who understands this.

It might be better to call my model a correct template not a model since I need more information to pick the right model.

And example I just posted lets say your depleted by a thousand units and you have say 500 customers. Lets assume 250 mess up in getting supples and they each suffer a 4 unit shortage for those with no reserves that use 4 units a day they simply do not use oil. Others draw down stocks etc.

I think you can see where this is going. The problem is you can partition this problem a lot of different ways and the time progression can be complex.
So I'm sure someone has studied this issue and ferreted out the correct or at least common models and parameters.

So basically I need more constraints before it could be a predictive model.

Right now you can easily see that even this simple design is close to reality since running low is very different from running out. A lot of people may well be running low at different times and further depletion will cause a cascade of true shortages. And its a bit insidious so the market can either not see whats happening or write it off to above ground factors. So its easy enough to see how the market could not see this happening and since we have scattered information on a lot of the uses of oil we don't even have enough data to detect the early but critical stages.

So anyone who feels I'm on the right track and can help I'd sure appreciate it I'd love to apply this to WT's export land to see how things play out. I really think we can get good leading indicators if we figure this out.