| Description |
1 online resource (36 pages) : illustrations |
| Series |
IMF working paper, 1018-5941 ; WP/16/131 |
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IMF working paper ; WP/16/131.
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| Contents |
Cover; Contents; Abstract; I. Introduction; II. A Simple Equilibrium of the Oil Market; A. Setup of the Model; B. Analysis of the Strategies; III. Model Results; IV. Qualitative Empirical Discussion; A. Drivers of Regime Switch; B. OPEC's Actions; C. Market Responses; V. Quantitative empirical calibration; A. Calibration Approach and Data; B. Accommodate Examples; C. Illustrative Squeeze Scenarios; D. Future Squeeze Equilibria; VI. Conclusions; Figures; 1. Impact of US shale capacity on OPEC profits and optimal production; 2. Oil demand, supply and price; 3. Oil supply and demand growth, mbd |
|
Tables1. Calibrating the model; References; Appendices; Appendix A: Proofs; Appendix B: Data Sources |
| Summary |
In November 2014, OPEC announced a new strategy geared towards improving its market share. Oil-market analysts interpreted this as an attempt to squeeze higher-cost producers including US shale oil out of the market. Over the next year, crude oil prices crashed, with large repercussions for the global economy. We present a simple equilibrium model that explains the fundamental market factors that can rationalize such a "regime switch" by OPEC. These include: (i) the growth of US shale oil production; (ii) the slowdown of global oil demand; (iii) reduced cohesiveness of the OPEC cartel; (iv) production ramp-ups in other non-OPEC countries. We show that these qualitative predictions are broadly consistent with oil market developments during 2014-15. The model is calibrated to oil market data; it predicts accommodation up to 2014 and a market-share strategy thereafter, and explains large oil-price swings as well as realistically high levels of OPEC output |
| Notes |
"July 2016." |
|
At head of title: International Monetary Fund, Middle East and Central Asia Department |
| Bibliography |
Includes bibliographical references (pages 29-33) |
| Notes |
Online resource; title from pdf title page (IMF.org Web site, viewed September 9, 2016) |
| Subject |
Organization of Petroleum Exporting Countries.
|
| SUBJECT |
Organization of Petroleum Exporting Countries fast |
| Subject |
Petroleum products -- Prices.
|
|
Oil-shale industry.
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Petroleum industry and trade.
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Oil-shale industry
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Petroleum industry and trade
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Petroleum products -- Prices
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| Form |
Electronic book
|
| Author |
Ritz, Robert A. (Robert Andrew), 1979- author.
|
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International Monetary Fund, publisher.
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International Monetary Fund. Middle East and Central Asia Department, issuing body.
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| ISBN |
9781498351638 |
|
1498351638 |
| ISSN |
1018-5941 |
|
