			Home About us Contact

Oil Prices (oil + price)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	78%
Chemistry	12%
Earth and Environmental Science	4%
2 Other Domains	6%

Terms modified by Oil Prices

oil price movement

Selected Abstracts

Who Suffers Most From High Oil Prices?

NEW PERSPECTIVES QUARTERLY, Issue 4 2000
Kofi Annan
No abstract is available for this article. [source]

Oil Prices and Stocks in the Second Quarter of 2004

OPEC ENERGY REVIEW, Issue 1 2004
OPEC Secretariat
Notwithstanding forecasting difficulties, the oil supply and demand balance has proved to be a good indicator of the state of the market and stock levels, which, in turn, influence price behaviour. In periods where OECD commercial stock levels lie within a certain range, currently around 2,450,2,650 million barrels, the range of prices is larger than when stock levels are very high or very low. In both the latter extreme situations, prices are prone to rapid movements, undermining market stability. Other factors, of course, also influence price fluctuations. The general opinion among regularly published oil market reports points to the inevitability of a higher-than-normal build in stocks in the second quarter of 2004. If the resulting surplus is not handled in a timely and effective manner, there is likely to be excessive downward pressure on prices, which, if left unattended, would lead to a protracted spell of volatility. [source]

Prices driven more by storage than oil price

NATURAL GAS & ELECTRICITY (PREVIOUSLY : NATURAL GAS), Issue 2 2000
Anthony E. Bopp
[source]

Econometric modelling for short-term oil price forecasting

OPEC ENERGY REVIEW, Issue 1 2010
Antonio Merino
There is a lot of interest in forecasting oil price and in analysing which variables most affect price movements, especially whether non-fundamental variables such as financial activity have any systematic impact on oil price. In this paper we approach both questions by constructing a congruent econometric model with financial and fundamental variables and by analysing the relative weight of the variables in explaining the oil price forecast. After testing for different variables we find that the most accurate forecast from a monthly econometric vector model on oil price is obtained when non-commercial long positions, petroleum stocks and spare capacity are included as explanatory variables. The incorporation of non-commercial long positions clearly improves the accuracy of the prediction. The vector model is specified to include empirical cointegration relationship, which provides an approximation on the long-run restriction postulated by economic theory. [source]

Dynamics of petroleum markets in OECD countries in a monthly VAR,VEC model (1995,2007)

OPEC ENERGY REVIEW, Issue 1 2008
Mehdi Asali
This paper contains some results of a study in which the dynamics of petroleum markets in the Organization for Economic Cooperation and Development (OECD) is investigated through a vector auto regression (VAR),vector error correction model. The time series of the model comprises the monthly data for the variables demand for oil in the OECD, WTI in real term as a benchmark oil price, industrial production in OECD as a proxy for income and commercial stocks of crude oil and oil products in OECD for the time period of January 1995 to September 2007. The detailed results of this empirical research are presented in different sections of the paper; nevertheless, the general result that emerges from this study could be summarised as follows: (i) there is convincing evidence of the series being non-stationary and integrated of order one I(1) with clear signs of co-integration relations between the series; (ii) the VAR system of the empirical study appears stable and restores its dynamics as usual, following a shock to the rate of changes of different variables of the model, taking between five and eight periods (months in our case); (iii) we find the lag length of 2 as being optimal for the estimated VAR model; (iv) significant impact of changes in the commercial crude and products' inventory level on oil price and on demand for oil is highlighted in our empirical study and in different formulations of the VAR model, indicating the importance of the changes in the stocks' level on oil market dynamics; and (v) income elasticity of deman for oil appears to be prominent and statistically significant in most estimated models of the VAR system in the long run, while price elasticity of demand for oil is found to be negligible and insignificant in the short run. However, while aggregate oil consumption does not appear to be very sensitive to the changes of oil prices (which is believed to be because of the so-called ,rebound effect' of oil (energy) efficiency in the macro level) in the macro level, the declining trend of oil intensity (oil used for production of unit value of goods and services), particularly when there is an upward trend in oil price, clearly indicates the channels through which persistent changes in oil prices could affect the demand for oil in OECD countries. [source]

Biofuels , Economic Aspects

CHEMICAL ENGINEERING & TECHNOLOGY (CET), Issue 5 2008
G. W. Festel
Abstract Assuming an oil price of US$60 per barrel, both biodiesel and bioethanol produced from wheat are not profitable in Europe. The producers' high margins are only due to the current mineral oil tax concessions. At present, biomass-to-liquid (BTL) fuel also cannot be produced competitively. At the assumed oil price, only bioethanol and biobutanol produced on a large scale from lignocellulose-containing raw materials have the potential to be produced competitively. Analyses of the technologies used in this field show that in Europe there are interesting new technological developments for the hydrolysis, fermentation and purification step. [source]

GUNS AND OIL: AN ANALYSIS OF CONVENTIONAL WEAPONS TRADE IN THE POST-COLD WAR ERA

ECONOMIC INQUIRY, Issue 2 2010
NEHA KHANNA
This paper analyzes the global conventional weapons trade between 1989 and 1999. We postulate that a key reason for the huge transfer of weapons to the Persian Gulf region is the enormous value of the oil wealth there along with the dependence of Western economies on access to the relatively cheap and steady supply of crude oil. We find a strong, positive, and robust empirical association between arms trade and crude oil trade and explain it as the result of a target price band arrangement that was responsible for the remarkably stable crude oil prices during our study period. (JEL F10, F59, Q38) [source]

SHOULD OIL PRICES RECEIVE SO MUCH ATTENTION?

ECONOMIC INQUIRY, Issue 4 2008
AN EVALUATION OF THE PREDICTIVE POWER OF OIL PRICES FOR THE U.S. ECONOMY
This paper evaluates the potential gains from using oil prices to forecast a variety of measures of inflation, economic activity, and monetary policy,related variables. With a few exceptions, oil prices do not have any predictive content for these variables. This finding is robust to the use of rolling forecast windows, the use of industry-level data, changes in the forecast horizon, and allowing for nonlinearities. (JEL Q43, E37, C32) [source]

China and the UK Economy

ECONOMIC OUTLOOK, Issue 5 2004
Article first published online: 29 OCT 200
China's boom has been a major pillar of the global economic recovery from early 2002 onwards. However, earlier this year fears that the economic boom was threatening to run out of control prompted the Chinese authorities to implement a number of targeted measures to try to restrain activity in the most overheated sectors. This article by Simon Knapp discusses both how much the UK has benefited from the China boom and how much it might be affected if the Chinese slowdown now becomes a hard landing. It argues that emerging Asia, Japan and raw materials producers have been the principal beneficiaries of the China boom, while the UK's gains have been small, because exports to the whole of Asia only account for 9% of the total. Equally, looking forward, the UK, and the UK's two major trading partners, the US and Eurozone, would only be relatively lightly affected if Chinese growth decelerated rapidly, as they would be helped by offsets such as lower oil prices and a lower interest rate profile. However, the current evidence suggests that the Chinese economy is slowing down in broadly the way the government wants, with the greatest deceleration in the previously overheated sectors but relatively little impact on the export and consumer sectors. An abrupt halt in bank lending could, however, still pose a significant downside risk. [source]

War and the global economy

ECONOMIC OUTLOOK, Issue 1 2002
Article first published online: 5 FEB 200
Recent months have seen the adoption of an increasingly belligerent stance towards Iraq on the parts of the US and the UK in particular, signalling a shift from the policy of containment that has been in place since the last Gulf War, and towards a more aggressive policy. As yet, it is unclear whether this increased belligerence will culminate in a renewed full,scale military engagement with Iraq, to achieve the much vaunted ,regime change', or whether the outcome will be an agreement to a new programme of weapons inspections. But the risk of a military conflict appears to have increased. This article assesses the potential economic implications of such a conflict, exploring different scenarios for how it might evolve, and their impact on oil prices and global growth. [source]

UK Assessment , The impact of the rise in oil prices on the UK economy

ECONOMIC OUTLOOK, Issue 1 2000
Article first published online: 16 DEC 200
First page of article [source]

Using Markets to Inform Policy: The Case of the Iraq War

ECONOMICA, Issue 302 2009
JUSTIN WOLFERS
Financial market-based analysis of the expected effects of policy changes has traditionally been exclusively retrospective. In this paper, we demonstrate by example how prediction markets make it possible to use markets to prospectively estimate policy effects. We exploit data from a market trading in contracts tied to the ouster of Saddam Hussein as leader of Iraq to learn about financial market participants' expectations of the consequences of the 2003 Iraq war. We conducted an ex-ante analysis, which we disseminated before the war, finding that a 10% increase in the probability of war was accompanied by a $1 increase in spot oil prices that futures markets suggested was expected to dissipate quickly. Equity price movements implied that the same shock led to a 1.5% decline in the S&P 500. Further, the existence of widely-traded equity index options allows us to back out the entire distribution of market expectations of the war's near-term effects, finding that these large effects reflected a negatively skewed distribution, with a substantial probability of an extremely adverse outcome. The flow of war-related news through our sample explains a large proportion of daily oil and equity price movements. Subsequent analysis suggests that these relationships continued to hold out of sample. Our analysis also allows us to characterize which industries and countries were most sensitive to war news and when the immediate consequences of the war were better than ex-ante expectations, these sectors recovered, confirming these cross-sectional implications. We highlight the features of this case study that make it particularly amenable to this style of policy analysis and discuss some of the issues in applying this method to other policy contexts. [source]

TERRORISM AND THE RETURNS TO OIL

ECONOMICS & POLITICS, Issue 3 2009
BROCK BLOMBERG
The effect of terrorism on global oil prices has been largely explained through demand-side effects. We estimate an empirical model to re-examine the effect of terrorism on the price of global oil stocks across oil market regimes that reflect different supply constraints. We believe that terrorism will have larger impacts when global capacity is tight (i.e. when global demand is close to global supply). This means that any shock to capacity (say by conflict) should have the largest impact on profits before the first OPEC shock in the early 1970s. Since then, conflict shocks would not allow firms to exploit production in the same way, thus reducing the available profits that could be garnered by such production manipulation. If capacity constraints are binding when a conflict occurs, then we predict that a positive stock price reaction can be expected for oil firms from such a shock. We exploit a new panel dataset to investigate the relationship between oil profitability and conflict, using conflict data from the top 20 oil producing and exporting countries in the world. We show that in the later part of our sample, 1974,2005, as cartel behavior of OPEC member countries has diminished and as conflict has become more regular and thus the information surrounding it noisier, oil stock prices do not increase in response to conflict. However, in earlier capacity constrained eras, we find that oil stocks can in fact increase in response to conflict. In some cases, the impact of conflict may cause the return of oil stocks to increase by as much as 10 percentage points. [source]

Non-Linear Oil Price Dynamics: A Tale of Heterogeneous Speculators?

GERMAN ECONOMIC REVIEW, Issue 3 2009
Stefan Reitz
Oil price dynamics; endogenous bubbles; STR-GARCH model Abstract. While some of the recent surges in oil prices can be attributed to a robust global demand at a time of tight production capacities, commentators occasionally also blame the impact of speculators for part of the price pressure. We propose an empirical oil market model with heterogeneous speculators. Whereas trend-extrapolating chartists may tend to destabilize the market, fundamentalists exercise a stabilizing effect on the price dynamics. Using monthly data for West Texas Intermediate oil prices, our STR-GARCH estimates indicate that oil price cycles may indeed emerge due to the non-linear interplay between different trader types. [source]

A Proposed Monetary Regime for Small Commodity Exporters: Peg the Export Price (,PEP')

INTERNATIONAL FINANCE, Issue 1 2003
Jeffrey Frankel
On the one hand, the big selling points of floating exchange rates , monetary independence and accommodation of terms of trade shocks , have not lived up to their promise. On the other hand, proposals for credible institutional monetary commitments to nominal anchors have each run aground on their own peculiar shoals. Rigid pegs to the dollar are dangerous when the dollar appreciates. Money targeting does not work when there is a velocity shock. CPI targeting is not viable when there is a large import price shock. And the gold standard fails when there are large fluctuations in the world gold market. This paper advances a new proposal called PEP: peg the export price. Most applicable for countries that are specialized in the production of a particular mineral or agricultural product, the proposal calls on them to commit to fix the price of that commodity in terms of domestic currency. A series of simulations shows how such a proposal would have worked for oil producers over the period 1970,2000. The paths of real oil prices, exports, and debt are simulated under alternative regimes. An illustrative finding is that countries that suffered a declining world market in oil or other export commodities in the late 1990s would under the PEP proposal have automatically experienced a depreciation and a boost to exports when it was most needed. The argument for PEP is that it simultaneously delivers automatic accommodation to terms of trade shocks, as floating exchange rates are supposed to do, while retaining the credibility-enhancing advantages of a nominal anchor, as dollar pegs are supposed to do. [source]

Real Options: Meeting the Georgetown Challange

JOURNAL OF APPLIED CORPORATE FINANCE, Issue 2 2005
Thomas E. Copeland
In response to the demand for a single, generally accepted real options methodology, this article proposes a four-step process leading to a practical solution to most applications of real option analysis. The first step is familiar: calculate the standard net present value of the project assuming no managerial flexibility, which results in a value estimate (and a "branch" of a decision tree) for each year of the project's life. The second step estimates the volatility of the value of the project and produces a value tree designed to capture the main sources of uncertainty. Note that the authors focus on the uncertainty about overall project value, which is driven by uncertainty in revenue growth, operating margins, operating leverage, input costs, and technology. The key point here is that, in contrast to many real options approaches, none of these variables taken alone is assumed to be a reliable surrogate for the uncertainty of the project itself. For example, in assessing the option value of a proven oil reserve, the relevant measure of volatility is the volatility not of oil prices, but of the value of the operating entity,that is, the project value without leverage. The third step attempts to capture managerial flexibility using a decision "tree" that illustrates the decisions to be made, their possible outcomes, and their corresponding probabilities. The article illustrate various kinds of applications, including a phased investment in a chemical plant (which is treated as a compound option) and an investment in a peak-load power plant (a switching option with changing variance, which precludes the use of constant risk-neutral probabilities as in standard decision tree analysis). The fourth and final step uses a "no-arbitrage" approach to form a replicating portfolio with the same payouts as the real option. For most corporate investment projects, it is impossible to locate a "twin security" that trades in the market. In the absence of such a security, the conventional NPV of a project (again, without flexibility) is the best candidate for a perfectly correlated underlying asset because it represents management's best estimate of value based on the expected cash flows of the project. [source]

Bioethanol: fuel or feedstock?

JOURNAL OF CHEMICAL TECHNOLOGY & BIOTECHNOLOGY, Issue 4 2007
Jeppe Rass-Hansen
Abstract Increasing amounts of bioethanol are being produced from fermentation of biomass, mainly to counteract the continuing depletion of fossil resources and the consequential escalation of oil prices. Today, bioethanol is mainly utilized as a fuel or fuel additive in motor vehicles, but it could also be used as a versatile feedstock in the chemical industry. Currently the production of carbon-containing commodity chemicals is dependent on fossil resources, and more than 95% of these chemicals are produced from non-renewable carbon resources. The question is: what will be the optimal use of bioethanol in a longer perspective? Copyright © 2007 Society of Chemical Industry [source]

Anatomy of a crisis: the causes and consequences of surging food prices

AGRICULTURAL ECONOMICS, Issue 2008
Derek Headey
Agricultural policy; Commodity markets; Biofuels Abstract Although the potential causes and consequences of recent rising international food prices have attracted widespread attention, many existing appraisals are superficial and/or piecemeal. This article attempts to provide a more comprehensive review of these issues based on the best and most recent research, as well as on fresh theoretical and empirical analysis. We first analyze the causes of the current crisis by considering how well standard explanations hold up against relevant economic theory and important stylized facts. Some explanations turn out to hold up much better than others, especially rising oil prices, the depreciation of the U.S. dollar, biofuels demand, and some commodity-specific explanations. We then provide an appraisal of the likely macro- and microeconomic impacts of the crisis on developing countries. We observe a large gap between macro and micro factors, which, when identifying the most vulnerable countries, often point in different directions. We conclude with a brief discussion of what ought to be learned from this crisis. [source]

Aviation fuel demand modelling in OECD and developing countries: impacts of fuel efficiency

OPEC ENERGY REVIEW, Issue 1 2009
Mohammad Mazraati
On the quest for reducing the fuel consumption per passenger per flight for economical and environmental reasons, commercial aircraft manufacturers are implementing new strategies for optimising aircraft performance by using new lighter and stronger materials and enhancing engines' efficiencies in terms of fuel consumption and maintenance requirements. With the rising and falling of economies, whether in the Organization for Economic Cooperation and Development (OECD) countries or other developing countries, the aviation industry has been affected by multiple factors such as passenger traffic, freight traffic, airport capacities and oil prices. Aircraft manufacturers have worked on improving the engine efficiency of their newly built airplanes (e.g. Airbus's A-380 and Boeing's B-787), and many airports in the world have increased the number of their runways to face the increasing demand for air traffic in the world. Aviation efficiency can also be achieved through better load management, which in return enables airliners to cope with higher oil prices or rising costs. Aviation fuel demand is modelled in OECD North America, Europe and Pacific regions and some selected developing countries. Price elasticities of fuel demand in all regions are low, while income elasticities are high. The elasticity of aviation fuel demand on passenger kilometre performed (PKP) is considerably low. One per cent increase in PKP leads to less than half a per cent increase in aviation fuel demand, confirming an ongoing fuel efficiency in aviation industry. [source]

Assessing oil resources in the Middle East and North Africa

OPEC ENERGY REVIEW, Issue 1 2009
Roberto F. Aguilera
Some energy experts are concerned that the world will soon face a global crisis to dwindling oil resources and a peak in production. This paper analyses the concern by estimating a cumulative supply curve for conventional oil in the Middle East and North Africa (MENA) region. It does so by attaching production costs to the endowment volumes of oil in the region, including volumes from provinces not previously assessed. A Variable Shape Distribution model is used to estimate the volumes of the previously unassessed provinces. The findings show that MENA oil should last far longer than some concerned experts claim. In addition, the production costs are lower than current market oil prices and significantly lower than prices observed in mid-2008. [source]

On the influence of oil prices on economic activity and other macroeconomic and financial variables,

OPEC ENERGY REVIEW, Issue 4 2008
François Lescaroux
The aim of this paper is to investigate the links between oil prices and various macroeconomic and financial variables for a large set of countries, including both oil-importing and oil-exporting countries. Both short-run and long-run interactions are analysed through the implementation of Granger-causality tests, evaluation of cross correlations between the cyclical components of the series in order to identify lead/lag relationships and cointegration analysis. Our results highlight the existence of various relationships between oil prices and macroeconomic variables and, especially, an important link between oil and share prices on the short run. Turning to the long run, numerous long-term relationships are detected, the Granger-causality generally running from oil prices to the other variables. An important conclusion is relating to the key role played by the oil market on stock markets. [source]

Dynamics of petroleum markets in OECD countries in a monthly VAR,VEC model (1995,2007)

Impact of higher oil prices on the Chinese economy

OPEC ENERGY REVIEW, Issue 3 2007
Sana Zaouali
The demand for oil in China has dramatically increased in the last years. Today, China is the second largest consumer of oil in the world behind the United States. This growing demand in oil comes in a context of steep international price hikes for oil. With its increasing oil consumption, China today plays a major role on the international oil markets, and a change in its consumption could seriously destabilise these markets. Moreover, today China occupies a preponderant place on the international scene, and a large drop in its economic activity could significantly affect world growth. It, therefore, is important for us to ask what the impact of the current increase in oil prices on the Chinese economy might be. The aim of this article is to conduct a quantitative analysis on the potential impact of the rise in oil prices on the Chinese economy. The macroeconomic and sectoral effects are evaluated with the help of a computable general equilibrium (CGE) model. Two scenarios were formulated: the first assuming a US $10 increase in international oil prices; the second, a $25 increase. [source]

Forecasting natural gas prices using cointegration technique

OPEC ENERGY REVIEW, Issue 4 2006
Dr Salman Saif Ghouri
This paper uses Augmented Dickey-Fuller and Phillips-Perron technique for determining whether individual crude oil prices (West Texas Intermediate, Brent, Japan crude cocktail) and natural gas prices- Henry Hub (HH), National Balancing Point (NBP), European and Japanese liquefied natural gas (LNG) prices are stationary or non-stationary. It then applies Johansen and Juselius cointegration technique for establishing long-run correlation between respective oil prices and natural gas prices. The paper concludes that all individual series pertaining to oil and natural gas prices are non-stationary and indeed having long-run relationship, despite short term drift. Ordinary least square method was used to forecast individual natural gas prices in various markets, assuming of course, that historical relationship continues to hold with respective oil prices throughout the forecasting period. Natural gas prices in each of the markets are expected to be stronger during 2005,25 as compared to respective historical average prices showing the tightness of the market. The mean NBP and HH forecast during 2005,25 are expected to be 92 and 84 per cent stronger than the historical average, whilst LNG prices in Japan continue to exhibit stronger trends during the forecast period as compared to rest of the markets in Europe and North America - showing greater dependency of imports and security of supply considerations. [source]

Forecasting volatility for options valuation

OPEC ENERGY REVIEW, Issue 3 2006
Mahdjouba Belaifa
The petroleum sector plays a neuralgic role in the basement of world economies, and market actors (producers, intermediates, as well as consumers) are continuously subjected to the dynamics of unstable oil market. Huge amounts are being invested along the production chain to make one barrel of crude oil available to the end user. Adding to that are the effect of geopolitical dynamics as well as geological risks as expressed in terms of low chances of successful discoveries. In addition, fiscal regimes and regulations, technology and environmental concerns are also among some of the major factors that contribute to the substantial risk in the oil industry and render the market structure vulnerable to crises. The management of these vulnerabilities require modern tools to reduce risk to a certain level, which unfortunately is a non-zero value. The aim of this paper is, therefore, to provide a modern technique to capture the oil price stochastic volatility that can be implemented to value the exposure of an investor, a company, a corporate or a Government. The paper first analyses the regional dependence on oil prices, through a historical perspective and then looks at the evolution of pricing environment since the large price jumps of the 1970s. The main causes of oil prices volatility are treated in the third part of the paper. The rest of the article deals with volatility models and forecasts used in risk management, with an implication for pricing derivatives. [source]

Energy use and GDP growth, 1950,97

OPEC ENERGY REVIEW, Issue 3 2002
Rögnvaldur Hannesson
This paper investigates the relationship between economic growth and growth in energy use in the latter part of the 20th century. The period is divided into five sub,periods, covering the low oil price era before the first energy crisis, the high oil price era, 1974,86, and a ten,year period after the drop in oil prices in 1986. It is found that the relationship between growth in energy use and gross domestic product (GDP) growth became weaker after the first energy crisis, but, after 1986, it seems to have become stronger again in rich countries. Energy use tends to grow more slowly than GDP in rich countries, while the opposite is true for poor countries, reflecting the fact that the energy intensity of GDP falls after countries have reached a certain level of affluence. One intriguing exception to this is China. [source]

Oil price movements and globalisation: is there a Connection?

OPEC ENERGY REVIEW, Issue 3 2002
Robert Looney
There has been considerable speculation over the years concerning the cost of large oil price movements ("shocks") to consuming countries. For the advanced industrial countries, the conventional wisdom appears to be that, because these economies are becoming more service,oriented, less energy is needed per unit of gross domestic product (GDP) and hence a lessening of the economic costs associated with increased oil prices. On the other hand, because many newly industrialised or catching,up countries are entering a phase of energy,intensive industrialisation, the same oil shocks are placing an increasing burden on these economies. One can easily argue, however, that industrialisation is only one facet of economic change taking place in the world economy. Conceivably, the rapid pace of increased globalisation may significantly modify these patterns. To test this proposition, an operational definition of globalisation is developed and shown to be positively associated with the strength of oil price shocks. The main finding of the study is that increased globalisation appears to be strengthening the impact of oil price shocks in the advanced industrial countries, but to a much lesser extent in the newly industrialising countries. [source]

Oil demand in North America: 1980-2020

OPEC ENERGY REVIEW, Issue 4 2001
Salman Saif Ghouri
This paper first analyses price and income elasticity of oil demand in the United States, Canada and Mexico for the period 1980-99. Economic activity is the main driving force that influences oil consumption in each country. Changes in oil consumption generally lagged by a few years before the full impact of changes in oil prices was realized. Consumers in the short run are constrained by technological and other barriers and, therefore, less sensitive to changes in oil prices; however, they are more responsive in the long run , though response is still inelastic. The use of advanced technology facilitated these countries to use less oil over time. The paper then looks at demand over the next 20 years. The best-fitting model predicts that, by the end of 2020 (reference case), the USA, Canada and Mexico will respectively consume 24,900, 2,596 and 2,321 thousand barrels daily, compared with 19,519, 1,943 and 1,970 thousand b/d in 1999. The model forecasts economic slowdown during 2000/2002. The USA and Canada are expected to recover quickly, while Mexico will take longer. [source]

The price of natural gas

OPEC ENERGY REVIEW, Issue 4 2001
A.M. Samsam Bakhtiari
Natural gas used to be a relatively Cheap primary energy source, always at a discount to crude oil (on a comparative British thermal unit basis). It gradually evolved into a major resource during the 20th century , reaching a 24 per cent share of global primary energy in 1999. In the year 2000, natural gas prices in the USA rose to unheard-of highs of $10/million Btu, ushering in a new era, with natural gas at a 120 per cent premium to crude oil. This clearly was a watershed for gas, somehow similar to the 1973-74 watershed for oil prices. And similarly, any return to the status quo-ante looks rather improbable, although a number of experts (alongside the International Energy Agency) still believe the 2000 price ,spike' to have been "only transitory" The consequences of higher gas prices (at a level equal to crude oil prices on a Btu basis) will be multifaceted and momentous, altering habits and uses in downstream industries and economic sectors, as well as providing added income for major gas-exporters, such as Russia, Canada and Algeria. Another potential consequence of the 2000 watershed might be to propel US standard prices (such as the ,Henry Hub' spot) to international status and gas price-setter, as the ,WTI spot' became an "international benchmark" for crude oils in the post-1993 era. For the time being, the equality of gas and oil prices has become the new norm; but, in the longer term, a discount of crude oil relative to natural gas might be envisaged, as the latter is a cleaner fuel and emits less carbon dioxide when used. [source]

Has oil lost the capacity to shock?

OXONOMICS, Issue 1 2006
David Walton
Recent high oil prices have neither triggered a recession nor caused inflation. This is in contrast to the ,stagflation' of the 1970s. The dissimilarity can be explained by increased labour market flexibility, central bank independence and the role of monetary policy. [source]