IDEAS home Printed from https://ideas.repec.org/a/nat/natene/v5y2020i2d10.1038_s41560-020-0549-1.html
   My bibliography  Save this article

Oil price regimes and their role in price diversions from market fundamentals

Author

Listed:
  • Robert. K. Kaufmann

    (Boston University)

  • Caitlin Connelly

    (Boston University)

Abstract

Speculative bubbles, market governance and property rights are thought to affect oil prices, but their timing and magnitude are uncertain. Here, we quantify these effects using econometric techniques that identify periods between 1938:1 and 2018:3 (denoting year:quarter) when prices strayed from the levels implied by market fundamentals. We identify nine price regimes that are associated with the Organization of the Petroleum Exporting Countries gaining control over the marginal supply of crude oil, US energy legislation, a precautionary demand shock, the Arab Spring and speculative bubbles. These bubbles raised real oil prices by US$14.31 and US$4.65 per barrel in 2007:4–2008:3 and 2010:1–2011:1, respectively, which transferred US$42.8 billion from US consumers to US oil producers and US$87.4 billion from the US economy to oil exporting nations. Conversely, some sharp changes, such as the price decline associated with the Asian financial crisis, can be explained by market fundamentals.

Suggested Citation

  • Robert. K. Kaufmann & Caitlin Connelly, 2020. "Oil price regimes and their role in price diversions from market fundamentals," Nature Energy, Nature, vol. 5(2), pages 141-149, February.
    • Handle: RePEc:nat:natene:v:5:y:2020:i:2:d:10.1038_s41560-020-0549-1
    DOI: 10.1038/s41560-020-0549-1
    as

    Download full text from publisher

    File URL: https://www.nature.com/articles/s41560-020-0549-1
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1038/s41560-020-0549-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. R W. Bentley & M. Mushalik & J. Wang, 2020. "The Resource-Limited Plateau in Global Conventional Oil Production: Analysis and Consequences," Biophysical Economics and Resource Quality, Springer, vol. 5(2), pages 1-22, June.
    2. Wu, Fei & Xiao, Xuanqi & Zhou, Xinyu & Zhang, Dayong & Ji, Qiang, 2022. "Complex risk contagions among large international energy firms: A multi-layer network analysis," Energy Economics, Elsevier, vol. 114(C).
    3. Arampatzidis, Ioannis & Dergiades, Theologos & Kaufmann, Robert K. & Panagiotidis, Theodore, 2021. "Oil and the U.S. stock market: Implications for low carbon policies," Energy Economics, Elsevier, vol. 103(C).
    4. Zhao, Yuejun & Fan, Guangjuan & Song, Kaoping & Li, Yilin & Chen, Hao & Sun, He, 2021. "The experimental research for reducing the minimum miscibility pressure of carbon dioxide miscible flooding," Renewable and Sustainable Energy Reviews, Elsevier, vol. 145(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nat:natene:v:5:y:2020:i:2:d:10.1038_s41560-020-0549-1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.nature.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.