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Haydn W

Falling oil prices offer the west a great chance to refashion itself. Let's seize it | ... - 1 views

www.theguardian.com/...west-chance-refashion-policies

The Guardian USA Russia Oil Prices Balance of Payments

shared by Haydn W on 05 Dec 14 - No Cached
  • Falling oil prices offer the west a great chance to refashion itself. Let’s seize it
  • For the past 18 months, the world’s biggest oil producer has been the US.
  • One first good result of this oil price shift, however, was witnessed at Opec’s meeting in Vienna last week. The once feared cartel of oil-exporting countries, with Saudi Arabia at its core, a cartel that at one time commanded more than half of global production, is now a shadow of its former self.
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  • the US will maintain this new standing for the foreseeable future, according to official projections.
  • It should be no surprise, then, that in the past rising oil prices were associated with recessions and falling oil prices with booms. If the oil price carries on falling back towards $50 a barrel, and if history is any guide, the western economy should respond – to the good.
  • But although particular companies may lose out, the first-round effect of this fall should provide good news. High oil prices depress economic activity. They suck money from consumer spending and redirect it to oil-exporting countries, which typically hoard it in elephantine foreign exchange reserves or unspent  bank deposits. It is a tax by the few on the many.
  • With the US needing to buy less oil on international markets and China’s growth sinking to its lowest mark for 40 years, there is now, amazingly, the prospect of an oil glut. The oil price instantly nosedived to its lowest level for four years, around $70 a barrel – down more than a third in three months.
  • Suddenly, the balance of economic advantage with Russia, no less dependent on oil and gas exports, will flip. Russia’s 2014 budget was based on an oil price of $100 a barrel. At $70 a barrel, the economy will contract by at least 3% in 2015, the country will run a balance of payments deficit and the government’s finances will spin out of control.
  • The chances of Russia sustaining a surrogate war in Ukraine have suddenly been reduced. All good news.
  • But western governments cannot hope that economic benefits will arrive automatically. These are new times.
  • Uncertainty and fear abound. Interest rates in Britain alone have been pegged at 0.5% for more than five years. But still business is reluctant to invest, not knowing what technologies to back or not knowing how much demand there will be for new products and services. We live in an era of stagnation, “secular stagnation”
  • So falling oil prices offer the world economy a great opportunity. But if it is not leapt upon purposefully by aggressively expansionary economic policy, secular stagnation might worsen.
  • Haydn W on 05 Dec 14
     
    The recent fall in oil prices, largely due to America's newfound dominance in the market, will cause Russia to experience a balance of payments deficit, according to this article from the Guardian. This is based on Russia's overestimate of the forecast for the global oil price and can be said to be an example of how global prices often influence balance of payments for countries, especially when it concerns national resources.
Marenne M

Nigeria devalues currency as oil prices drop - FT.com - 5 views

www.ft.com/...9b-11e4-8321-00144feabdc0.html

'currency value'

shared by Marenne M on 25 Nov 14 - No Cached
  • Nigeria has devalued its currency by nearly 10 per cent and raised interest rates to record levels, in one of the clearest signs yet of how oil producing nations are struggling as energy prices drop sharply.
  • Marenne M on 25 Nov 14
     
    This article describes the devaluation of the fixed currency rate of Nigeria as a result of the decreased energy prices. Nigeria is an oil producing country and therefore earns a lot of its income through oil exports. Now that the prices of other energy has dropped, there is a lower demand for the Nigerian oil, leading to fewer exports. The Nigerian central bank has now devaluated its currency by 8.4 percent in the hope that the lower prices will encourage a greater demand for their oil exports.
Yassine G

The End Of Elastic Oil - Forbes - 1 views

www.forbes.com/...the-end-of-elastic-oil

elasticity demand Scarcity resources energy price Supply

shared by Yassine G on 18 Oct 13 - No Cached
  • Yassine G on 18 Oct 13
     
    This is a very interesting article that really helps understand this topic in depth and with real examples. Oil market is one of the largest in the world, this article talks about elasticity of demand and supply in this market. There is an explanation on the effects of different factors that determine the elasticity and what they do for this market. 
  • Jakub B on 20 Oct 13
     
    Although there are discovered new sources of oil (e.g. in Saudi Arabia), the suppliers have to drill deeper which is time-consuming and therefore the costs of production rise. 'In economic terms, the oil supply is becoming less elastic as new oil supplies come increasingly from unconventional oil.'
Marenne M

Energy challenges: Importing coal will darken balance of payments, says Bengali - The E... - 0 views

tribune.com.pk/...lance-of-payments-says-bengali

balance of payments

shared by Marenne M on 22 Dec 14 - No Cached
  • Marenne M on 22 Dec 14
     
    This article discusses the impact of oil imports on the Pakistani balance of payments. In Pakistan, each year approximately 5 billion dollars worth of oil is imported due to its heavy consumption, which has a large impact on their balance of payments. Their large number of imports gives them a negative balance of payments and therefore slow down economic growth and impacts other parts of the economy. In the article it is suggested that the Pakistani use domestic coal for power production rather than importing as much oil, which could half the amount of money spent on oil imports therefore reforming their balance of payments.
Pietro AA

Analysis: Energy costs keep Japan's focus on nuclear, despite risks and use of renewabl... - 0 views

www.foxnews.com/...-nuclear-despite-risks-and-use

scarcity Opportunity Cost energy risks japan

shared by Pietro AA on 16 Sep 13 - No Cached
    • Pietro AA
      Pietro AA on 16 Sep 13
       
      Other scarse vaariables introduced: time and technology
    • Pietro AA
      Pietro AA on 16 Sep 13
       
      safety is a desire of most men and it is also not infitite therefore it is scarse.
  • ctions take about six months for each reactor, and obtaining con
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    • Pietro AA
      Pietro AA on 16 Sep 13
       
      a conflict between the scarsity of safety and scarsity of energy
    • Pietro AA
      Pietro AA on 16 Sep 13
       
      a conflict between the scarsity of safety and scarsity of energy
  • Energy costs keep Japan's focus on nuclear, despite risks and use of renewables
  • other plants remained closed for intensified safety checks
  • The issue is cost, and to a lesser extent, concern over a resurgence in climate-changing carbon emissions due to increased use of coal and oil to generate power. Clean energy still only accounts for 10 percent of total consumption — most of it hydropower. Much of the new capacity approved has yet to come online.
  • nuclear power remains essential, even with a surge in generation capacity from solar, wind and other renewable sources, and that the world's No. 3 economy cannot afford the mounting costs from importing gas and oil.
  • Japan has managed to avoid power rationing and blackouts. Industries have moved aggressively to avoid disruptions by installing backup generators and shifting to new sources, such as solar power.
  • households no
  • paying 30 percent more for electricity than before, with more rate hikes to come.
  • prompted a rethink of plans to raise nuclear capacity from one-third to over half of total demand.
  • Reliance on imported oil and gas has surged from about 60 percent of energy consumption to about 85 percent.
  • The recent weakening of the Japanese yen has added to the burden on the economy from oil and gas imports.
  • Abe and others in favor of resuming nuclear power contend that renewable energy is too expensive and unreliable — wind doesn't always blow, the sun doesn't always shine.
  • Apart from those issues, national security requires that Japan retain some self-sufficiency
  • Local communities are divided: many have relied heavily on nuclear plants for jobs and tax revenues, but worry over potential risks.
  • hat there's a huge opportunity in power
  • We're also seeing radical efficiency gains.
  • he disposal and security of nuclear waste are issues yet to be resolved.
  • For now, however, it appears any phase-out of nuclear power will be very gradual.
  • "In the long term if we can create new resources that are more efficient than the current oil-based system, then we can rely less on nuclear power, that's quite possible," Adachi said. "But it will take quite a long time."
  • Pietro AA on 16 Sep 13
     
    This article shows how, since the meltdown of the Fukushima plant in 2011, the "want" of security (which is scarce) increased and gave energy problems to the country (energy is one of the most important scarce resources . Japan finds itself making decisions limited by the scarcity of energy, safety, time and technology. Should it take risks and stop spending money? Should it keep everybody safe and just go for the hydrocarbur plants? Should it simply invest on renewable energy plants? Should it take time and reaserch   Pietro
Pietro AA

U.S. Oil Prices: Let the Good Times Roll - 1 views

oilprice.com/...s-Let-the-Good-Times-Roll.html

equilibrium prediction oil dollar

shared by Pietro AA on 15 Oct 13 - No Cached
  • Pietro AA on 15 Oct 13
     
    A great article talking about how the equilibrium of the oil market affects currencies, especially the dollar as barrels are mainly exchanged using dollars.
Hardy Hewson

Mexico Ends National Crude Oil Monopoly - 4 views

www.bloomberg.com/...l-as-mexico-ends-monopoly.html

government monopoly Supply

shared by Hardy Hewson on 18 Feb 14 - No Cached
  • Hardy Hewson on 18 Feb 14
     
    After 75 years of barring foreign investment into her oil fields, the Mexican government (particularly President Enrique Pena) is set to repeal laws that had previously ensured a state monopoly of Mexican crude oil. As one of the biggest crude resources in the Western Hemisphere, this move poses a dramatic increase in North American crude exports, which will rise to second in quantity behind only Saudi Arabia. The bill to end the monopoly was approved by the Mexican Congress in mid-December and could see foreign investment eventually rise to approximately $15 billion per year. However, potential issues arise in the form of material delays, local opposition to drilling and a lack of pre-existing infrastructure.
Haydn W

Taxing Carbon Is Like Taxing Diamonds | Mary Manning Cleveland - 0 views

www.huffingtonpost.com/...bon-is-like-tax_b_3965170.html

Huffington Post Price Elasticity Fossil Fuels Carbon Emissions Demand Supply

shared by Haydn W on 19 Oct 13 - No Cached
  • Taxing Carbon Is Like Taxing Diamonds
  • To reduce carbon emissions, we must tax fossil fuels -- but, say the pundits, we can't do so because the tax would be regressive, clobbering the poor.
  • Imagine that we impose a sales tax on diamonds. Would we worry about the burden on middle-class purchasers of one-fourth-caret engagement rings? What about the part of the tax "passed back" onto the DeBeers Group? Not much sympathy for global monopolists either.
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  • Surprisingly, a carbon tax would operate much like a diamond tax, for reasons both of demand and supply.
  • Demand: The wealthy actually consume a disproportionate amount of carbon. Discussions of a carbon tax usually focus on the price of gasoline. One gallon of gas produces about 17 pounds of CO2. One metric ton is 2,204 pounds. So a $100 tax on a ton of CO2 comes to $0.77 per gallon -- a significant cost to low-income commuters and small truckers.
  • A May 2013 federal study of the Social Cost of Carbon estimated costs of additional CO2 emissions for 2010 to 2050 ranging from $27 to $221 per metric ton in 2050, depending on assumptions.
  • Demand elasticity for oil is low, about 0.5; so a 1 percent increase in oil price would cause a 0.5 percent decrease in consumption. That makes sense, since in the short run, it's hard for people to cut energy consumption, especially if they must drive to work. But, though numbers are hard to come by, elasticity of supply is much, much lower, for two reasons. First, oil production takes decades and billions in capital investment; producers cannot quickly increase or decrease supply. Second, oil producers form an international cartel, an organized mega-monopoly, which holds down production to drive up prices. Since they're already charging what the traffic will bear, they can't much raise prices to cover a tax.
  • As economists long ago figured out, buyers and sellers share a tax in inverse proportion to elasticity. Therefore, if supply elasticity of carbon is, say, 0.1, while demand elasticity is 0.5, the suppliers will pay five times as much of the tax as consumers. That reduces that $0.77 per gallon gas tax to only $0.13. Moreover, precisely because most of the tax falls on suppliers, it will generate plenty of revenue to help those unfortunate long-distance commuters and small truckers, to build more public transportation, to invest in renewable energy, and even to cut super-regressive taxes like the payroll tax.
  • According to Edward Wolff, in 2007, the top 1 percent in the U.S. owned 43 percent of non-home wealth, mostly securities, including of course energy company stocks and bonds. The top 10 percent of wealth holders owned 83 percent.
  • But the very poor don't drive or travel or occupy much space; the rich fly planes, including private jets; drive to low-density suburbs; occupy and heat multiple houses and hotels; and buy lots of stuff. Clearly the rich consume much more carbon per capita than the poor.
  • So we have good news and bad news. Good news: The cost of reducing carbon emissions will fall hardest on the 1 percent, who consume the most energy and own the energy companies. Bad news: Ditto. Expect a fight!
  • Haydn W on 19 Oct 13
     
    This article talks about the economic implications of imposing a tax on carbon emissions and how this would affect the different social classes of society in different ways. The article makes specific reference to economic theory and the elements on elasticity.
  • Jakub B on 20 Oct 13
     
    Taxation almost always decrease the economic surplus and therefore it makes a decline in effectiveness. In this case, the energy companies will be the most affected group.
John B

Biz/ed - Price Elasticity | Biz/ed - 0 views

www.bized.co.uk/...2443.htm

price elasticity

shared by John B on 20 Oct 13 - Cached
  • Oil plays a big part in its energy costs - energy accounts for around 30 - 40% of its refining costs and with oil prices having risen it has had a big impact on the company.
  • they are in a competitive market and it is likely that if they increased their prices, people would look elsewhere at rivals products or they would simply put off purchasing the items until a later stage.
  • Recent econometric research into the price elasticity of demand for sugar suggests that it is nearly zero
  • John B on 20 Oct 13
     
    This article is about how the rising oil prices affect the companies that produce sugar. The article tells us that sugar is inelastic because of many factors, for example very few substitutes so by rising the prices of sugar in the market, it does not really affect the demand for it.
Haydn W

Fossil fuel subsidies 'killing UK's low-carbon future' | Environment | The Guardian - 0 views

www.theguardian.com/...il-fuel-subsidies-green-energy

The Guardian Fossil Fuels G20 UK Subsidy Environment

shared by Haydn W on 07 Nov 13 - No Cached
  • Fossil fuel subsidies 'killing UK's low-carbon future'
  • despite commitments to cut carbon emissions and reduce "perverse" fossil fuel subsidies.
  • Britain is "shooting itself in the foot" by subsidising its coal, oil and gas industries by $4.2bn (£2.6bn) a year even as government reviews the "green levies" on energy bills which support energy efficiency and renewable power, according to a report published on Thursday.
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  • The figures from the Overseas Development Institute suggest that Britain is now the world's fifth largest subsidiser of fossil fuels
  • For every $1 spent to support renewable energy, another $6 were spent on fossil fuel subsidies
  • In 2011, the latest year for which data is available, Britain gave tax breaks of £280m to oil and gas producers and reduced VAT on fossil fuels by several billion pounds
  • Rich countries have committed to phase out "inefficient" fossil fuel subsidies but the ODI figures, drawn from the International energy agency, OECD and other sources, suggest global subsidies to fossil fuel producers totalled $523bn a year in 2011 – dwarfing subsidies to renewable energies.
  • £2.6bn yearly incentive favours investment in carbon at the expense of green energy, says thinktank
  • In effect, each of the 11.6bn tonnes of carbon emitted from the top 11 developed countries comes with an average subsidy of $7 a tonne – around $112 for every adult
  • The figures have been released as ministers prepare to go to Poland for the deadlocked UN climate talks and as uncertainty surrounds the future of government-mandated levies on energy bills that support fuel poverty schemes and renewable energy.
  • G20 governments accepted in 2009 that fossil fuel subsidies encourage wasteful consumption, reduce energy security, and undermine efforts to deal with the threat of climate change.
  • The report said: "Investors are being sent the wrong signals on two fronts as carbon prices decline and fossil fuel subsidies increase."
  • The report argues that fossil fuel subsidies also fail in one of their core stated objectives, which is to to benefit the poorest.
  • Haydn W on 07 Nov 13
     
    This article describes how the UK government is heavily subsidising fossil fuel producers instead of prioritising and investing money in renewable sources of energy. Although it is essential to keep crude oil and fossil fuel prices low, as they are essential to many businesses, consumers and indeed the country itself, the G20, of which the UK is part of, has made a commitment to phasing out fossil fuels in favour of greener and more sustainable energy sources. 
Mariam P

Premier Oil Drops as Production Forecast Misses Estimates - 1 views

www.bloomberg.com/...forecast-misses-estimates.html

efficiency

shared by Mariam P on 08 Feb 14 - No Cached
  • Mariam P on 08 Feb 14
     
    This article tells us that the "Premier Oil Plc (PMO)" fell as an output forecast missed analyst estimates.But they are planning to take into account production efficiency and to plan maintenance periods. After the output have to increase in 2014. Which will help them to get up again.
Aleksi B

The oil spill, global warming and negative externalities - Views From Baja Arizona - 0 views

tucsoncitizen.com/...ing-and-negative-externalities

Externalities oil spill global warming production government

shared by Aleksi B on 24 Nov 13 - No Cached
  • A negative externality is an action of a product on consumers that imposes a negative side effect on a third party. Many negative externalities are related to the environmental consequences of production and use.
  • Aleksi B on 24 Nov 13
     
    Externalities of production - This article relates to how environmental disasters lead to a  negative externalaty
Daniel B

Which oil & gas stocks to buy in volatile environment - 0 views

economictimes.indiatimes.com/...23638150.cms

Price Elasticity

shared by Daniel B on 22 Oct 13 - No Cached
  • Daniel B on 22 Oct 13
     
    This article shows the best possible market where inelastic demand is common. The oil and gas are the products that have the price elasticity of demand below the one. It is caused by the cooperation of the industries and miners as well as it is really hard to find such a good substitutes for it.
Sholpan Marabayeva

UPDATE 3-Russian central bank prepares strategy for sharp oil price drop - 1 views

uk.reuters.com/...bank-oil-idUKL6N0RW1G520141001

supply-side government price supply inflation monetary

shared by Sholpan Marabayeva on 05 Oct 14 - No Cached
  • Sholpan Marabayeva on 05 Oct 14
     
    This is an article on how Russia's central bank will address the sharp oil price drop. This article relates to what we are doing because it talks about the strategy of the Russian central bank. the central bank is a key tool for the monetary policy, which we are covering right now. Also this article briefly mentioned balance of payments, and the negative consequences of the bank failing to address this issue. It was a very interesting read.
Marenne M

Regulating the petrol oligopoly - The Express Tribune - 1 views

tribune.com.pk/...egulating-the-petrol-oligopoly

oligopoly

shared by Marenne M on 03 Mar 14 - No Cached
  • In theory, petrol prices in Pakistan are deregulated, but in practice, the government still has considerable sway over oil pricing. This is because of the unusual structure of the oil marketing industry, which has fewer than a dozen national players, and the largest company in the industry is a state-owned entity that controls over two-thirds of the market.
  • It is also a market that sells a necessary product where many of the suppliers can often have local monopolies or oligopolies. In short, it is ripe for market manipulation, unless the government acts to control such activity.
  • What is the point of having a regulatory authority if it does not have the power to levy punishments for those who violate the law?
  • ...1 more annotation...
  • ensure a level playing field and fair play
  • Amanda Anna G on 03 Mar 14
     
    The article is about regulating the petrol oligopoly in Pakistan. It argues that the petrol-firms under oligopoly set their own high prices, and the government is deregulating the prices but the prices are still too high. 
  • Marenne M on 04 Mar 14
     
    Oligopolies contain firms that operate at a profit maximizing level and that in the short run can have burst of price changes. These changes in prices are due to an instant attempt at increasing the market share, however this leads to issues for other firms as well as consumers. In order for this to be prevented, government regulation is an option. This article describes how instead of regulating the industry the government is operating it, and what problems this causes
Yassine G

SC: Gas price war between GAIL and GSPCL to be decided by arbitration - Economic Times - 0 views

articles.economictimes.indiatimes.com/...ltd-gas-supply-agreement-gspcl

gas price monopolies dispute large PLCs

shared by Yassine G on 12 Oct 13 - No Cached
  • Daniel B on 12 Oct 13
     
    this article talks about the price mechanism and influence on the price that could be caused by two corporations which are very strong on this market. both industires have impact on price and the dispute should be resolved by the supreme court.
  • Yassine G on 12 Oct 13
     
    This article gives us an idea on how prices of some necessities are set. In this case two of the biggest companies in the oil market in their area are having some disagreements on what the price should be. Since they have a big share of the market, they act like a monopoly. the supreme court intervention was required to help settle this dispute.
Marenne M

Oil prices will drop if U.S. lifts crude export ban: study | Shanghai Daily - 2 views

www.shanghaidaily.com/...article_xinhua.aspx

aggregate supply

shared by Marenne M on 01 Apr 14 - No Cached
  • Gasoline costs are tied to a global market, and this study shows that additional exports could help increase supplies, put downward pressure on the prices at the pump and bring more jobs to America.
  • if export was allowed, the cost of gasoline, heating oil and diesel fuel is projected to fall
  • United States is expected to shift from a net importer to a net exporter by 2020
  • ...1 more annotation...
  • On an aggregate supply-demand basis, the country is rapidly approaching a self-sufficiency rate of 90 percent
  • Marenne M on 01 Apr 14
     
    This article describes how the U.S. is considering becoming more self-suffiecient in the fuel industry. The want to decrease their  imports and increase exports. Decreasing their imports will decrease import cost, increasing the aggregate supply. Simultaneously, increasing export will increase aggregate demand. This will shift the U.S. from a net importer to a net exporter.
Hyobin Lim

S.Korea's inflation falls to 7-month low on easing supply-side pressure - 2 views

http://news.xinhuanet.com/english/business/2014-10/01/c_133686923.htm

supply side

started by Hyobin Lim on 06 Oct 14 1 follow-up, last by Hyobin Lim on 06 Oct 14
Clemence Lafeuille

China to invest $20bn in struggling Venezuela - 0 views

www.aljazeera.com/...enezuela-2015188152276388.html

Venezuela China foreign direct investment oil

shared by Clemence Lafeuille on 03 Mar 15 - No Cached
  • Clemence Lafeuille on 03 Mar 15
     
    This article is about China's FDI into Venezuela. Because of the recent drop in oil prices, Venezuela is suffering so China is placing FDIs in deals that include technology, housing and urban planning. The hope here is to develop a relationship between the two nations, but as we have seen in class it might not be truly beneficial to the LEDC.
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