Estimation and projections of demand for crude petroleum and refined petroleum products

The purpose of this article is to estimate the demand and supply relationships of the US petroleum market. By measuring the elasticities and cross-elasticities of demand, the relative responsiveness of changes in prices and income and the possibility of substitution of alternative energy resources for petroleum are determined. The demand for refined products is also estimated. Finally, through projection of the demand for, and the domestic supply and imports of crude petroleum under alternative assumptions, a measure of the magnitude of physical reserves and capital requirements is obtained for policies of self-sufficiency and free trade.