Fall In Oil Prices Research Articles

ECONOMIC CONSEQUENCES OF PEAK OIL FOR THE MAJOR MULTINATIONAL OIL AND GAS COMPANIES

The main goal of this work is to analyze the financial statements of the five major multinational oil and gas companies, for the 2011-2015 period, in the framework of the peak oil phenomenon. Peak oil can affect key financial indicators (e.g., earnings volatility, leverage) that are used by managers, investors, and stockholders and which may potentially lead to changes in the decision making by management. Our results show that the decline in oil production affects the decisions about investment in new oil wells, leverage, dividends paid, shares purchased and net income involving the five major companies. In addition, we study the evolution of oil prices, and its influence in several items of the financial statements. Even though oil prices were at high levels during 2011-2014, however, the net income of the five companies actually declined due to the impact of peak oil. Finally, data for the last year studied (2015) indicate a general deterioration in return ratios and other accounting variables. Although the new investments should have been profitable, they have been influenced by peak oil, compromising the economic position of the companies. The advice to these companies would be to relax their investments, especially during a period of falling oil prices. Company managers need to recognize the prolonged duration of peak oil and price trends to promote profitability recovery decisions.

Global Oil Price and Its Economic Impact in Bangladesh

This paper highlighted the plummeting price of oil that is at present the most sensational energy story in the world. This research work outlined the main reasons for the current situation is the low demand for oil as well as concerned companies found it more profitable to extract oil by unconventional methods. In Bangladesh, no changes have been made in the oil price. By figure, at present (June 2017) BPC (Bangladesh Petroleum Corporation) is making profit of Tk 13.77 per liter of Kerosene, of Tk 14.68 per liter of Diesel, of Tk 19.57 per liter of Furnace oil and of Tk 18.75 per liter of jet fuel oil where the very latest world crude oil price come down $ 35.62. The present study is done to make the overview of the world oil prices and Bangladesh as well using purely secondary data collected mostly from newspaper reports, websites, magazines, journals, periodic, reviews and various published data. This study also investigates the impact of the sharp fall oil price to the economy of Bangladesh. In the study, there is seen negatively correlation with the oil price of the world and that of Bangladesh. This paper will be useful to the all stakeholders even policy makers to take proper initiatives for the adjustment of the plummeting oil price of the world. This present study may disseminate that the BPC, as the government-sponsored firm, cannot make the maximum profit as like the Monopoly Company in Bangladesh, so, the retail consumer may give the benefits of the adjustment with the sharp oil price fall in the world.

트럼프의 경제정책과 러시아 경제

The purpose of this thesis is to analyze the impact of the Trump administrationʹs economic policy(Trumponomics) on the Russian economy. Trumpʹs “America First” plan focuses on trade protectionism, expansionary fiscal policy, energy policy, and monetary policy. First, trade protectionism will not have a significant impact on Russian foreign trade. Most of all, trade ties between the U.S. and Russia are minuscule: U.S. goods exports to Russia totaled just $5.8 billion in 2016, equivalent to less than 0.4% of U.S. exports to world. U.S. goods imports from Russia totaled $15.3 billion, just under 0.7% of U.S. imports from world. There is no free trade agreement between the United States and Russia. Second, the expansionary fiscal policy is unlikely to have a negative impact on the Russian economy as it is unclear whether it will be implemented or not, and that it is creating jobs and economic growth in the United States. Third, US Federal Reserveʹs interest rate hike and balance sheet reduction will accelerate capital outflows in Russia, which will have a significant impact on the russian foreign exchange market Fourth, Trump’s Energy Dominance policy in global energy production will have a considerable negative impact on the Russian economy, which is highly dependent on energy resources. The increase in of shale oil production in the United States will lead to a fall in international oil prices. The decline in oil prices will lead to a reduction in export income, a decrease in financial revenues, and an increase in uncertainty and volatility in the Russian economy by encouraging foreign exchange market instability.

The young luxury consumer in Qatar

PurposeThis study aims to examine the factors influencing Qatari youth’s attitude toward luxury brands and intentions to purchase luxury brands. The appetite for luxury spending in the Gulf region and specifically in Qatar is accelerating even with the fall in oil prices and faltering economic growth.Design/methodology/approachBoth qualitative research in the form of in-depth interviews and quantitative research in the form of survey were utilized in this study. Initially, eight in-depth interviews were conducted with luxury store owners and/or salespersons to identify the most important factors influencing attitude toward luxury brands. Furthermore, 330 Qatari respondents between the ages from 16 to 25 years were interviewed via a mall-interception method at two different malls with high-end/ luxury stores in Doha. Structural equation modeling using AMOS was run to analyze the hypothesized relationships between variables and test the model fit.FindingsThe findings indicated the overall fitness of the model. More specifically, the results indicated that fashion involvement, brand consciousness, social comparison and experiential needs have a significant impact on attitude toward luxury brands and consequently on their purchasing intentions.Research limitations/implicationsThis study has several limitations. A more comprehensive framework can be proposed including more variables that may also influence the attitude of youth toward purchasing luxury, for example, brand prominence, vanity and functional value. Comparative studies across demographics (e.g. male vs female and adult vs young luxury buyers) as well as across different cultures and countries can also provide interesting insights related to luxury purchasing behavior among youth. Developing a typology for Qatari luxury consumers can also be very insightful, specifically for supporting brand owners in fine-tuning their marketing and targeting strategies. Finally, other moderating variables like influence of social media or peer influence can also be considered in future studies.Originality/valueThe study sheds light on a significantly important and emerging phenomenon; the increasing consumption of luxury in the gulf region and specifically in Qatar in an attempt to understand the main drivers to their attitude toward luxury brands in general.

Exploration Versus Acquisition of Oil and Gas Reserves: Effect on Stock Returns

This paper examines how oil and gas companies’ reserves growth affects their share price returns. In particular, we examine three issues affecting the relation between reserves changes and oil and gas firm returns. First, we examine if investors value reserves replacement because of exploration activities differently to reserves growth through acquisitions. In the second analysis, we test if reserves replacement of oil reserves impacts stock returns differently than changes in gas reserves do. Third, we examine the impact of the Shale gas revolution and the subsequent oil and gas price divergence on the association between returns and replacement of oil versus gas reserves. The results suggest that investors seem to be indifferent to reserves replacement strategy (exploration or acquisition). However, we find that changes in oil reserves impact oil and gas company returns differently than changes in gas reserves does. Moreover, we find that there has been a structural shift in the relation between returns and changes in gas reserves (but not changes in oil reserves) after 2008, coinciding with the Shale gas revolution and the break in the oil-gas price link. This latter result can be relevant for understanding the impact of the recent fall in oil prices on investor valuation of oil and gas reserves.

Impacts of exchange rate volatility and international oil price shock on China's regional economy: A dynamic CGE analysis

A multi-regional dynamic computable general equilibrium model is constructed in this paper to explore the macroeconomic effects of international oil price shocks and RMB exchange rate changes on China. The results show that (1) in terms of regional development differences, the decrease in international oil prices and depreciation of RMB are both conducive to economic growth, although the impact of RMB devaluation is more obvious. Increases in international oil prices will further widen the output gap between the rich and the poor regions, whereas oil price decreases and RMB devaluation will narrow the regional development differences. (2) In terms of employment, the depreciation of the exchange rate and the decline in international oil prices will help increase the employment rate in most regions, but oil price hikes will be most beneficial for improving oil industry employment in the northeast. (3) The impact of oil price volatility is asymmetric. Compared with rising oil prices, falling oil prices have significantly greater effects on GDP, industrial output, employment and other aspects. Furthermore, the impacts of exchange rate fluctuations and oil price changes on the regional economy exhibit a time lag.

Ways to Overcome the Economic Crisis and the Role of Statistics in Decision-making: the Experience of Azerbaijan

The problems faced by the Azeri economy on account of the falling oil price, the slowing economic growth in the countries that are its key trade partners, and the parallel processes in finance and bank sector are discussed. It is shown that due to the reducing external investment, the rather strong dependence on imports and the shadow employment, the underdeveloped human capital, Azerbaijan risks to be moved to the group of countries with medium or even low rates of profitability.
 Four strategic goals of the road map for the national economy, developed for the transition to the new concept of economic development, are highlighted. It is argued that the sustainable economic development can be achieved through implementing these goals and the strategic road maps on 11 industries of the national economy, by setting the balance between its non-financial and financial sector.
 In analyzing the strategic road map for the national economy, it is emphasized that improvement in the statistics infrastructure is one of its action areas. Its main objective is to enhance the quality of statistical information for taking more effective decisions on extending the capabilities of supplementary support for the reforms. The importance of statistical reporting for analyses of the implementation of national programs and development guidelines adopted in Azerbaijan is emphasized. The role of statistics in analyses of the current performance and results of measures specified in the road maps at macroeconomic and sectoral level is underlined. The instruments for statistical data collection are enumerated. The branches of statistics where reorganization is a prime objective are determined. The need for actions to ensure international comparability of statistical data, integration of administrative data, development of the statistical information system on the basis of official methodology is substantiated.

Impact of Collaboration Amongst Tax Authorities on Revenue Generation and Service Delivery to Taxpayers in Nigeria

This paper examined the influence of collaboration among tax authorities on revenue generation and service delivery to taxpayers in Nigerian context. The quest for this paper came as a result of the increasing demand for public revenue generation and efficient tax system in the development of Nigerian economy; and also given the current pressure on tax authorities to improve revenue generation sequel to the persistent fall in oil price. More so, the need for increase in tax revenue in Nigeria and the attendant improvement in service delivery to the teeming taxpayers has taken its toll on the economic landscape. The study, which employed secondary data focused on tax authorities across the three tiers of Governments, but sampled out Federal tax authority as the source of data for analysis. The findings agreed that collaboration among tax authorities does impact positively on both the revenue generation and service delivery to taxpayers. It recommended for a sustainable collaboration framework among tax authorities, and suggested for further empirical study on the topic.

E&P Notes (September 2017)

E&P Notes Researchers: Models Overstate Technology Impact, Understate Location Impact for Unconventional Wells Joel Parshall, JPT Features Editor The role of new technological improvements in the increasing productivity of tight oil and shale gas wells is likely being overestimated because of models that inadequately consider the influence of drilling in reservoir core areas, a pair of researchers at the Massachusetts Institute of Technology Energy Initiative (MITEI) have said in a new paper. With the steep fall in oil prices since late 2014, field operators are drilling fewer wells and have shifted their targets to only the most prospective acreage. The oil industry’s often well-publicized gains in well productivity significantly reflect the impact of drilling and hydraulic fracturing operations focused on reservoir “sweet spots,” MITEI’s Justin Montgomery and Francis O’Sullivan write in a paper in Applied Energy. Drilling Boom Goes Flat Stephen Rassenfoss, JPT Emerging Technology Senior Editor Growth in the US rig count stalled in mid-July, in what could be a sign of things to come. After doubling over the previous 12 months, the rig count remained flat, slipping to 949 as of 11 August, according to the Baker Hughes Rig Count. But surveys of industry insiders by the Federal Reserve banks of Dallas and Kansas City see that rally running out, with shrinking spending on capital expenditures (Capex) and drilling. “We see the expected Capex and expected drilling number are still positive. It is a lot less positive than in the first quarter and certainly in the fourth quarter of last year,” said Chad Wilkerson, the branch executive and economist at the Kansas City Fed’s Oklahoma City branch, adding, “Leveling seems to be the story.” US Daily Oil Production To Break Record in 2018 Joel Parshall, JPT Features Editor Average total crude oil production in the United States is expected to reach a record level of 9.9 million B/D in 2018, the US Energy Information Administration (EIA) said in its latest forecast. The projected output would surpass the 9.6 million B/D that the US produced in 1970. The forecast said that total US crude oil production will average 9.3 million B/D this year, an increase of 500,000 B/D from 2016. Most of the production growth from June through the end of next year is expected to come from tight rock formations in the Permian region of Texas and from the Federal Offshore Gulf of Mexico (GOM). IEA: US May Be Top LNG Exporter by 2022 Trent Jacobs, JPT Digital Editor The US may become the global leader in liquefied natural gas (LNG) exports, according to a new report by the International Energy Agency (IEA). To ascend to the top spot, US LNG shipments must surpass today’s leading exporters, Australia and Qatar. The IEA called US LNG a “catalyst for change” and highlighted how production from tight shale gas fields is transforming the world’s natural gas marketplace. The Paris-based organization also said the country’s exports will help fuel economic growth in developing countries.

How do daily changes in oil prices affect US monthly industrial output?

Detecting asymmetry has become increasingly difficult using single frequency data. This paper goes beyond the prevailing use of aggregate/averaged data in order to provide a more in-depth treatment of the dynamic effects of the price of crude oil on industrial output growth. To do so, we propose an Asymmetric Mixed Data Sampling (AMIDAS) model to examine if there is any concealed evidence of asymmetry arising from daily effects of the price of crude oil on monthly changes in industrial output in the United States (US). We find that this model is able to detect dynamic asymmetric impacts of a high frequency independent variable on a low frequency dependent variable more effectively than when the high frequency variable is aggregated up at the time interval of the low frequency variable. We find that, in comparison with the marginal lagged effects of a rise in the daily price of crude oil, the effects of a fall in the daily price of crude oil are more sluggish as it takes longer for the effects of the oil price drop to die off over time. This finding implies that a fall in the price of crude oil shifts the supply curve rightward less and at a much slower pace than an equivalent price rise shifts it to the left.

The impacts of oil price shocks on small oil-importing economies: Time series evidence for Liberia

This study reviews the relevant literature on oil price impacts and then applies both asymptotic and bootstrap distribution techniques to model various oil price shocks and to subsequently evaluate their impacts on key macroeconomic variables in Liberia.First, we find that different oil shock measures yield different effects. Second, asymmetries in oil price exist and can be explained by Liberia's lack of structured financial markets and tight monetary policy controls. Third, the impact of oil shocks on all variables is limited to the short-run. Fourth, unlike most developed economies, falling oil price regimes yield no benefits to economic growth in the short-run, but rising oil prices appear to stimulate the Liberian economy.Therefore, we argue that when oil price increases in Liberia, the high costs of reallocating resources from oil-intensive sectors lead to labor intensiveness; whose contribution to Liberian GDP by far exceeds that of oil. Hence, a general insight from the study is that where substitution possibilities exist, rising oil prices lead to high labor and capital intensity and could have off-setting effects depending on the contribution of these factors to GDP. Thus, falling oil price regimes in Liberia should witness policy measures aimed at boosting the service sector.

Iraq

This 2017 Article IV Consultation highlights a double shock facing Iraq as a result of the conflict with the Islamic State and the plunge in oil prices. In 2016, real GDP increased by 11 percent owing to a 25 percent increase in oil production, which was little affected by the conflict with the Islamic State. Falling oil prices have driven the decline in Iraq’s international reserves from $54 billion at the end of 2015 to $45 billion at the end of 2016. Medium-term growth prospects are positive. Growth will be driven by the projected moderate increase in oil production and the rebound in non-oil growth supported by the expected improvement in security and implementation of structural reform.

Prudent Management of Oil Revenues: Impacts of Government Capital Expenditures in Azerbaijan

Azerbaijan is an oil rich country facing three severe problems at the same time: economic volatility, the need to promote industrial diversification and the recent sharp fall in oil prices which many expect to continue. It is thus a highly appropriate time to conduct a study for this resource-rich country that would relate its insufficient and ineffective industrial diversification to the effectiveness of its efforts to overcome these problems, including the encouragement of FDI, the creation of its State Oil Fund and the establishment of a fiscal rule. To this end, in this study we pull together empirical evidence concerning the allocation of oil windfall gains, the quality of the country’s budgetary institutions and its State Oil Fund and their effects on Azerbaijan’s budgetary outcomes. But, more uniquely, we develop and apply some models to capture the long terms effects of oil prices and fiscal management on industrial diversification, where we find the efforts to date to have fallen far short of what is needed. Our analysis leads us to suggestions for much needed improvements in policy.

Business cycles in an oil economy

The recent oil price fall has created concern among policy makers regarding the consequences of terms of trade shocks for resource-rich countries. This concern is not a minor one – the world’s commodity exporters combined are responsible for 15–20% of global value added. We develop and estimate a two-country New Keynesian model in order to quantify the importance of oil price shocks for Norway – a large, prototype petroleum exporter. Domestic supply chains link mainland (non-oil) Norway to the off-shore oil industry, while fiscal authorities accumulate income in a sovereign wealth fund. Oil prices and the international business cycle are jointly determined abroad. These features allow us to disentangle the structural sources of oil price fluctuations, and how they affect mainland Norway. The estimated model provides three key results. First, oil price movements represent an important source of macroeconomic volatility in mainland Norway. Second, while no two shocks cause the same dynamics, conventional trade channels make an economically less significant difference for the transmission of global shocks to the oil exporter than to oil importers. Third, the domestic oil industry’s supply chain is an important transmission mechanism for oil price movements, while the prevailing fiscal regime provides substantial protection against external shocks.

Knowledge retention and aging workforce in the oil and gas industry: a multi perspective study

PurposeThe purpose of this paper is to investigate how companies are handling the issue of knowledge retention from old age retiring workers in the oil and gas sector. This is achieved by providing a detailed insight on the challenges and strategies related to knowledge retention through study of companies from different geographical locations across the globe.Design/methodology/approachThe study adopts a qualitative research methodology and 20 semi-structured interviews, with open-ended and probing questions, were conducted to gain an in-depth insight into the knowledge retention phenomena.FindingsKnowledge retention activities tend to be inconsistent in majority of the oil and gas companies, with not much work being done regarding knowledge loss from old employees, partly because of the fall in oil prices and layoffs. Oil prices turn out to be a decisive factor in oil and gas industry regarding workforce and knowledge retention activities. The political situation and geographical locations of the companies also affect the knowledge retention activities. Moreover, the aging workforce and retirement issue is more acute in the upstream sector.Research limitations/implicationsThe focus of the study was on the oil and gas sector, and thus the research results may lack generalizability.Originality/valueThis paper fulfills an identified need for investigating the issues and challenges of knowledge retention regarding old age retiring employees by taking into account a global perspective and providing a comparison among different companies in different geographical locations.

경제변화에 대한 저작권산업의 미래예측과 발전과제 연구

This study uses the time series data of the copyright industry and economic variables in the ARIMA intervention model to determine the size of future copyright industry when the price index, oil price, KOSPI, deposit rate, exchange rate Predicted the change. The results of this research model are as follows. First, there is a negative correlation between the price index and the deposit rate. KOSPI showed positive (+) relationship. Oil prices and exchange rates were not statistically significant. Second, the ARIMA intervention model is modeled on the rise in the price index, the fall in oil prices, the fall in KOSPI, the rise in deposit rates, and the depreciation of the exchange rate, Predicted the future of the size of the copyright industry. Third, by modeling the ARIMA intervention model using a stabilized variable that has not been affected by the economic shock after the global financial crisis, the falling index, rising oil prices, rising KOSPI, falling deposit rates, Respectively. Even if the economic changes after the global financial crisis are impacted, it is necessary to implement a crisis management system for major economic variables and to implement policy and institutional measures to cope with foreign exchange risks.

The role of the oil transfers in the fiscal policy: the case of Azerbaijan

The Azerbaijan economy has been more sensitive to the fluctuations in the world market. Unlike from the other developing countries, the main source of this relationship has been oil-gas products. That is why, the falling oil prices in the world oil market has affected the macroeconomic situation in Azerbaijan. In this context, the main goal of the paper is to investigate the fiscal policy in Azerbaijan for the last decade. The author applies the correlation and data analysis of the state budget of Azerbaijan with investigating the relationship between the transfers from the State Oil Fund (SOFAZ) and some groups of the expenditures.

Optimizing Economic Number of Transverse Fractures in Horizontal Well: A Systematic Design for Maximum Tight Gas Recovery

Over the last two decades, the worldwide demand for energy has been met with substantial increase in the oil supply which causes fall in oil price. However, the price of gas has been stabled despite increased demand for gas as a major source of energy. The production from gigantic conventional reservoirs has also reduced which has led to the dependence on current reserves to meet the demand. This increase in demand for gas has led to the increase in activities of research and development with an objective to explore and exploit unconventional resources as an economic and effective cost. Hydraulic fracturing has been proven to be one of the most viable means used to exploit the unconventional resources (tight gas and shale gas formations). Thus, evaluating the performance of the well post-fracturing is necessary to determine the economic viability of the recovery. Inaccurate evaluation of the post-fracturing can lead to either overestimation or underestimation of the design performance particularly from transversely fractured horizontal well. This work includes convergence skin effect that occurs at every intersection of fractures and horizontal section of the well which can account for wide variation of the post treatment in the field from the simulation model. The variation in the skin is a function of fracture conductivity and the number of transverse fractures. This work has developed a hydraulic fracture optimization model which shows the optimal design point, that is, the optimal number of transverse fractures estimated from the economic analysis and gives optimal production rate. This optimal number of transverse fractures estimated from this work is cost effective. This model can lead to an increase in accuracy of optimum design.

Impulse on the Aggregate Demand in Bolivia through the Coordination of the Monetary and Fiscal Policy in Crisis Time

At the end of 2014, the Bolivian economy, despite facing negative external shocks (falling oil prices), registered a high economic growth in the region of Latin America. Monetary policy was aimed at keeping the government bond rate close to zero and raising liquidity levels in the economy (monetary policy expansive). On the part of the government, the two main sources of income of the nonfinancial public sector (SPNF) are: i) tax revenues and ii) the sale of hydrocarbons (gas), at that time Bolivia's fiscal policy was countercyclical To the behavior of the Latin American Product (increases in fiscal expenditure in infrastructure). These antecedents, aid to the interest of the study of the coordination of the economic policy in Bolivia. The structure of a Dynamic Stochastic General Equilibrium Model (DSGE) helps us to understand the transmission channels of shocks (in Taylor rule, Phillips curve and public investment) and how the monetary and fiscal policy reacts to these shocks.

Review of Australia's Petroleum Resource Rent Tax: Implications from a Case Study of the Gorgon Gas Project

Australia has welcomed new business investment of $200 billion for integrated gas projects. However lower than expected tax receipts have tempered the early optimism of project benefits. In particular, petroleum resource rent tax (PRRT) revenues since the 2002–03 financial year have fallen. These reduced revenues have raised concerns about the effectiveness of petroleum taxation in Australia and pressured the Australian Government to call for a review of the PRRT in late 2016. Examined are the modifications necessary to the petroleum fiscal regime to address one of the PRRT Review's aims of providing an equitable return to the Australian community. Findings from a case study of an operational gas project include the need for PRRT modifications, and the addition of royalties for particular integrated natural gas projects in Commonwealth waters. The article is significant for its unique overview of Australia's petroleum taxation since the fall in oil prices from mid-2014 and the rise of gas export projects. This interdisciplinary and empirical research forms an important contribution to the current Commonwealth PRRT Review through its recommendations for change to the Petroleum Resource Rent Tax Assessment Act 1987 (Cth). It calls for more uniform federal legislation for the taxation of petroleum resource projects.