The oil market will move towards balance in 2022

2021 ◽  
Keyword(s):  
Energy Transition ◽  
Energy Markets ◽  
Free Rider ◽  
Content Type ◽  
Demand Growth ◽  
Free Rider Problem ◽  
The Past ◽  
Oil Market ◽  
Oil Exports ◽  
Current Price

Significance The rebound in demand from the pandemic slump should keep the market in deficit, supporting current price levels. However, in 2022, demand growth is expected to slow, while supply from non-OPEC+ producers will accelerate. A potential return of Iranian oil exports and further pandemic reversals remain major downside risks. Impacts Forecasts suggest a return to normality in 2022, but discontinuities with the past remain powerful forces reshaping global energy markets. If pandemic concerns recede, energy transition impacts will move to the fore. Non-OPEC supply growth plus expectations of more muted demand increases mean OPEC will still have a 'free rider' problem to address. Oil services companies’ prospects should improve but margins will remain thin.

The Battle over Patents

2021 ◽  
Keyword(s):  
Division Of Labor ◽  
Market Value ◽  
Historical Record ◽  
Free Rider ◽  
Property Right ◽  
Economic Surplus ◽  
Free Rider Problem ◽  
The Past ◽  
Inventive Activity ◽  
Patent Systems

Do patents facilitate or frustrate innovation? Lawyers, economists, and politicians who have staked out strong positions in this debate often attempt to validate their claims by invoking the historical record—but they typically get the history wrong. The purpose of this book is to get the history right by showing that patent systems are the product of contending interests at different points in production chains battling over economic surplus. The larger the potential surplus, the more extreme are the efforts of contending parties, now and in the past, to search out, generate, and exploit any and all sources of friction. Patent systems, as human creations, are therefore necessarily ridden with imperfections; nirvana is not on the menu. The most interesting intellectual issue is not how patent systems are imperfect, but why historically US-style patent systems have come to dominate all other methods of encouraging inventive activity. The answer offered by the essays in this volume is that they create a temporary property right that can be traded in a market, thereby facilitating a productive division of labor and making it possible for firms to transfer technological knowledge to one another by overcoming the free-rider problem. Precisely because the value of a patent does not inhere in the award itself but rather in the market value of the resulting property right, patent systems foster a decentralized ecology of inventors and firms that ceaselessly extends the frontiers of what is economically possible.

Multiple banking relationships, agency costs and firm value: evidence from India

2019 ◽  
Vol 46 (1) ◽  
pp. 1-18 ◽  
Author(s):  
Nemiraja Jadiyappa ◽  
Bhanu Sireesha ◽  
L. Emily Hickman ◽  
Pavana Jyothi
Keyword(s):  
Firm Value ◽  
Fixed Effects ◽  
Emerging Market ◽  
Negative Relationship ◽  
Bank Lending ◽  
Free Rider ◽  
Content Type ◽  
Free Rider Problem ◽  
Banking Relationships ◽  
Prior Literature

Purpose Prior literature demonstrates that the effectiveness of bank monitoring decreases when multiple banks are involved, due to a free rider problem, leading to lower firm value. The purpose of this paper is to investigate whether this free rider problem exists in an emerging market context, and whether the relationship between multiple banking relationships and firm value is conditioned on bankers’ incentives to monitor. Design/methodology/approach The authors use multivariate panel regression to examine the hypotheses. The conditioning effect of the incentive to govern (the amount of average bank lending) is modeled using an interaction variable. Based on the result of the Hausman test, the authors employ two-way fixed effects estimator to estimate the coefficients. Findings First, the negative relationship between multiple banking relationships and firm value holds true among Indian firms. Second, the authors show that this negative relationship is lessened for firms with high average bank debt or higher free cash flows. The analyses suggest that these moderating effects are related to a reduction in the free rider problem rather than a decrease in financial constraints. However, these results are only significant among larger firms. Originality/value Prior literature has not considered the conditioning impact of the “incentives to govern” when examining the free rider problem, inherent in situations where multiple actors are involved. The authors show in this study that the free rider problem disappears when the incentives to govern are considered in the overall research framework.

US price-driven oil demand growth will fade in 2017

2016 ◽  
Keyword(s):  
Economic Activity ◽  
The United States ◽  
Oil Price ◽  
Major Contributor ◽  
Job Market ◽  
Content Type ◽  
Fuel Prices ◽  
Demand Growth ◽  
The Past ◽  
Oil Demand

Subject US oil demand growth. Significance The oil price collapse from mid-2014 that has caused pain for producers has been a boon to US consumers. With pump prices for gasoline at record lows, US motorists covered 3.186 trillion miles from July 2015 to July this year, smashing the previous record for any previous twelve-month period. This, along with a relatively strong job market and economic growth, has fuelled a resurgence in US oil demand growth after years of post-recession stagnation, and has been a major contributor to the modest price recovery seen over the past six months. Impacts Weaker demand should see a decline in US oil and refined product imports from OPEC and other producers. US refiners may see margins shrink and will look abroad for new customers. However, Latin America is likely to be the most attractive destination for refined product exports from the United States. Weaker demand growth will keep storage levels elevated despite production falls, acting as a drag on US oil and fuel prices. Increases in US freight travel from renewed economic activity will push up diesel prices.

Iraqi Kurds’ economic recovery will be limited

2019 ◽  
Keyword(s):  
Local Government ◽  
Federal Government ◽  
Economic Recovery ◽  
Kurdistan Region ◽  
Content Type ◽  
The Past ◽  
Oil Exports ◽  
Economic Outlook

Subject The economic outlook for Iraq’s Kurdish region. Significance The Kurdistan Region of Iraq (KRI) has seen a limited economic recovery over the past year. It suffered catastrophically following the central government's imposition of sanctions following the region’s abortive 2017 independence bid. Impacts A likely larger federal government allocation to the KRI in the 2019/20 budget will facilitate economic recovery. Increased US pressure to boost Iraqi oil exports to Turkey will increase local government revenues. As both local and federal government revenues depend on oil, falling prices would cause another contraction.

US output will negate most of extended OPEC cuts

2017 ◽  
Keyword(s):  
Gulf Coast ◽  
Fiscal Stress ◽  
State Governments ◽  
Potential Threat ◽  
Content Type ◽  
The Past ◽  
The Us ◽  
Oil Exports ◽  
Deep Recession ◽  
Dependent State

Significance The US shale oil industry has mounted a comeback over the past six months. After a deep recession brought on by plunging oil prices starting in mid-2014, the sector is growing again as prices have stabilised and US oil output is rising, approaching record levels once again. OPEC’s May 26 meeting was a potential threat to that recovery, but the cartel’s decision to hold the line on its regime of production cuts ensures continued growth for US oil. Impacts US oil exports will rise this year on higher output from the Permian oilfield, which is well connected to Gulf Coast export facilities. An uptick in drilling will contribute to the overall tightening of the US labour market, pushing up wages and oilfield services costs. Restored royalty flows will ease some fiscal stress on oil-dependent state governments such as Alaska and North Dakota.

China will help Brunei ease reliance on crude exports

2018 ◽  
Keyword(s):  
Oil Refinery ◽  
Short Term ◽  
Economic Diversification ◽  
Content Type ◽  
Petrochemical Complex ◽  
The Past ◽  
Local Labour ◽  
Oil Exports ◽  
Chinese Workers ◽  
Chinese Foreign Direct Investment

Subject Brunei's economic diversification. Significance Sultan Hassanal Bolkiah, ruler of Brunei for the past 50 years, is turning to Chinese foreign direct investment (FDI) and engineering companies to expand his country’s infrastructure and reduce its dependence on crude oil exports. The first phase of the China-funded Pulau Muara Besar (PMB) oil refinery and petrochemical complex is due to open in early 2019. Impacts A rise in oil prices will drive Brunei’s GDP growth in the short term. Reliance on Chinese companies will increase the number of Chinese workers brought to Brunei, limiting opportunities for local labour. Within ASEAN, Brunei will support Beijing on South China Sea issues.

Zinc deficit is unsustainable over the longer term

2017 ◽  
Keyword(s):  
Base Metal ◽  
Price Volatility ◽  
Mineral Deposits ◽  
Content Type ◽  
Demand Growth ◽  
The Past ◽  
Market Outlook ◽  
Market Leader ◽  
Second Year ◽  
China’S Economy

Subject Zinc market outlook. Significance Zinc has been the best-performing base metal over the past two years. Robust demand from China, falling inventories and a second year of reduced supply from mines have pushed up prices by nearly 90% since the beginning of 2016. Impacts The proportion of zinc in mineral deposits being mined will likely fall to less than 5% in 2018, putting further pressure on supply. Market leader Hindustan Zinc's locking in of prices for 25% of its output implies it expects price volatility. 'Rebalancing' of China's economy could slow the country's demand growth to 0.6% annually in coming years.

Iran could disrupt Strait of Hormuz navigation

2018 ◽  
Keyword(s):  
Crude Oil ◽  
Oil Production ◽  
International Market ◽  
Islamic Revolution ◽  
Content Type ◽  
Oil Market ◽  
Oil Exports ◽  
Strait Of Hormuz ◽  
Supreme Leader ◽  
Military Preparedness

Significance This followed several days of wargames in the area by the Islamic Revolution Guard Corps (IRGC). US plans to reinstate sanctions on Iran -- the first tranche came into effect today -- and to restrict vital oil exports from November have triggered an exchange of threats and counter-threats between Tehran and Washington. Iranian officials warn that they may prevent other exporters from using the narrow strait, transited by about 20 million barrels a day of crude oil for the international market. Impacts Tensions in the Gulf will result in sharp price hikes in an already-strained oil market. In case of escalation, Iran might consider surgical targeting of Saudi and other enemy oil production and export chokepoints. IRGC efforts to display determination and military preparedness could cause tensions with the more cautious Rouhani government. If Supreme Leader Ali Khamenei were incapacitated, IRGC policy could become less constrained and predictable.

scholarly journals Will Shale Impede or Accelerate the Global Energy Transition?

2021 ◽  
Author(s):  
Keyword(s):  
United States ◽  
Energy Transition ◽  
Supply Curve ◽  
Tight Oil ◽  
Market Dynamics ◽  
Shale Oil ◽  
Global Energy ◽  
The Past ◽  
Oil Market ◽  
Supply Shocks

United States (U.S.) shale has transformed oil market dynamics in ways we never thought possible. Shale oil has transformed the oil supply curve through massive supply shocks, such as the rapid increase in tight oil production over the past decade, alongside productivity and technology developments.

Sign in / Sign up

Export Citation Format

Share Document