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Short-Run Crude Oil Price and Surplus Production Capacity

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  • Michael Ye
  • John Zyren
  • Joanne Shore

Abstract

This paper shows the effect that surplus crude oil production capacity has on short-term crude oil prices. A simple model using Organization for Economic Co-operation and Development (OECD) industrial inventories and Organization of the Petroleum Exporting Countries (OPEC) surplus production capacity is introduced. This model provides improved forecasts for the post Gulf War I time period over models without the capacity variable. Copyright IAES 2006

Suggested Citation

  • Michael Ye & John Zyren & Joanne Shore, 2006. "Short-Run Crude Oil Price and Surplus Production Capacity," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 12(3), pages 390-394, August.
    • Handle: RePEc:kap:iaecre:v:12:y:2006:i:3:p:390-394:10.1007/s11294-006-9026-2
    DOI: 10.1007/s11294-006-9026-2
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    References listed on IDEAS

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    1. Robert K. Kaufmann, Stephane Dees, Pavlos Karadeloglou and Marcelo Sanchez, 2004. "Does OPEC Matter? An Econometric Analysis of Oil Prices," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 67-90.
    2. Stephen G. Powell, 1990. "The Target Capacity-Utilization Model of OPEC and the Dynamics of the World Oil Market," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 27-64.
    3. Avinash K. Dixit & Robert S. Pindyck, 1998. "Expandability, Reversibility, and Optimal Capacity Choice," NBER Working Papers 6373, National Bureau of Economic Research, Inc.
    4. Carol Dahl & Mine Yücel, 1991. "Testing Alternative Hypotheses of Oil Producer Behavior," The Energy Journal, , vol. 12(4), pages 117-138, October.
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    Citations

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    Cited by:

    1. Prat, Georges & Uctum, Remzi, 2011. "Modelling oil price expectations: Evidence from survey data," The Quarterly Review of Economics and Finance, Elsevier, vol. 51(3), pages 236-247, June.
    2. Michael Ye & John Zyren & Carol Blumberg & Joanne Shore, 2009. "A Short-Run Crude Oil Price Forecast Model with Ratchet Effect," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 37(1), pages 37-50, March.
    3. Fan, Ying & Liang, Qiang & Wei, Yi-Ming, 2008. "A generalized pattern matching approach for multi-step prediction of crude oil price," Energy Economics, Elsevier, vol. 30(3), pages 889-904, May.
    4. Ms. Malika Pant & Mr. Martin Mühleisen & Mr. Alun H. Thomas, 2010. "Peaks, Spikes, and Barrels: Modeling Sharp Movements in Oil Prices," IMF Working Papers 2010/186, International Monetary Fund.

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    More about this item

    Keywords

    Crude Oil Price; Petroleum Inventory; Surplus Production Capacity; Q40;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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