Crude Volatility

The History and the Future of Boom-Bust Oil Prices

Author: Robert McNally

Publisher: Columbia University Press

ISBN: 0231543689

Category: Business & Economics

Page: 288

View: 9161

As OPEC has loosened its grip over the past ten years, the oil market has been rocked by wild price swings, the likes of which haven't been seen for eight decades. Crafting an engrossing journey from the gushing Pennsylvania oil fields of the 1860s to today's fraught and fractious Middle East, Crude Volatility explains how past periods of stability and volatility in oil prices help us understand the new boom-bust era. Oil's notorious volatility has always been considered a scourge afflicting not only the oil industry but also the broader economy and geopolitical landscape; Robert McNally makes sense of how oil became so central to our world and why it is subject to such extreme price fluctuations. Tracing a history marked by conflict, intrigue, and extreme uncertainty, McNally shows how—even from the oil industry's first years—wild and harmful price volatility prompted industry leaders and officials to undertake extraordinary efforts to stabilize oil prices by controlling production. Herculean market interventions—first, by Rockefeller's Standard Oil, then, by U.S. state regulators in partnership with major international oil companies, and, finally, by OPEC—succeeded to varying degrees in taming the beast. McNally, a veteran oil market and policy expert, explains the consequences of the ebbing of OPEC's power, debunking myths and offering recommendations—including mistakes to avoid—as we confront the unwelcome return of boom and bust oil prices.
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King of Oil

Marc Rich - Das abenteuerliche Leben des Rohstoff-Tycoons und Glencore-Gründers

Author: Daniel Ammann

Publisher: N.A

ISBN: 9783280055625

Category:

Page: 317

View: 4702

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The Vega Factor

Oil Volatility and the Next Global Crisis

Author: Kent Moors

Publisher: John Wiley & Sons

ISBN: 1118077091

Category: Business & Economics

Page: 448

View: 9769

How oil volatility is affecting the global political scene, and where the oil market is heading The world is rapidly moving towards an oil environment defined by volatility. The Vega Factor: Oil Volatility and the Next Global Crisis takes an in-depth look at the most important topics in the industry, including strategic risk, why traditional pricing mechanisms will no longer govern the market, and how the current government approaches have only worsened an already bad situation. Details the industry's players, including companies, traders, and governments Describes the priorities that will need to be revised, and the policies needed to achieve stability Explains how today's oil market is fundamentally different from the pre-crisis market Oil prices affect everyone. The Vega Factor explains the new international oil environment of increasing consolidation and decreasing competition, and reveals how consumers and investors can navigate price volatility and new government policies.
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The Economics of Food Price Volatility

Author: Jean-Paul Chavas,David Hummels,Brian D. Wright

Publisher: University of Chicago Press

ISBN: 022612908X

Category: Business & Economics

Page: 440

View: 7480

There has been an increase in food price instability in recent years, with varied consequences for farmers, market participants, and consumers. Before policy makers can design schemes to reduce food price uncertainty or ameliorate its effects, they must first understand the factors that have contributed to recent price instability. Does it arise primarily from technological or weather-related supply shocks, or from changes in demand like those induced by the growing use of biofuel? Does financial speculation affect food price volatility? The researchers who contributed to The Economics of Food Price Volatility address these and other questions. They examine the forces driving both recent and historical patterns in food price volatility, as well as the effects of various public policies in affecting this volatility. The chapters include studies of the links between food and energy markets, the impact of biofuel policy on the level and variability of food prices, and the effects of weather-related disruptions in supply. The findings shed light on the way price volatility affects the welfare of farmers, traders, and consumers.
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The Interrelationship Between Financial and Energy Markets

Author: Sofia Ramos,Helena Veiga

Publisher: Springer

ISBN: 3642553826

Category: Business & Economics

Page: 302

View: 2881

In the last decade, energy markets have developed substantially due to the growing activity of financial investors. One consequence of this massive presence of investors is a stronger link between the hitherto segmented energy and financial markets. This book addresses some of the recent developments in the interrelationship between financial and energy markets. It aims to further the understanding of the rich interplay between financial and energy markets by presenting several empirical studies that illustrate and discuss some of the main issues on this agenda.
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Trading VIX Derivatives

Trading and Hedging Strategies Using VIX Futures, Options, and Exchange Traded Notes

Author: Russell Rhoads

Publisher: John Wiley & Sons

ISBN: 0470933089

Category: Business & Economics

Page: 272

View: 8366

"Trading VIX Derivatives will be a comprehensive book covering all aspects of the Chicago Board Options Exchange stock market volatility index. The book will explain the mechanics and strategies associated with trading VIX options, futures, exchange trading notes and options on exchange traded notes. Known as the "fear index" the VIX provides a snapshot of expectations about future stock market volatility and generally moves inversely to the overall stock market. As such, many market participants look at the VIX to help understand market sentiment and predict turning points. With a slew of VIX index trading products now available, there are a variety of strategies traders use to speculate outright on the direction of market volatility or to use the products in conjunction with other instruments to create spread trades or hedge their overall risk. A top instructor at the CBOE's Options Institute, the author will reflect the wide range of uses associated with the VIX and will make the book useful to both new traders and seasoned professionals"--
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Recent Dynamics of Crude Oil Prices

Author: Mr. Noureddine Krichene

Publisher: International Monetary Fund

ISBN: 1451910126

Category: Business & Economics

Page: 28

View: 2077

Crude oil prices have been on a run-up spree in recent years. Their dynamics were characterized by high volatility, high intensity jumps, and strong upward drift, indicating that oil markets were constantly out-of-equilibrium. An explanation of the oil price process in terms of the underlying fundamentals of oil markets and world economy was provided, viewing pressure on oil prices mainly as a result of rigid crude oil supply and an expanding world demand for crude oil. A change in the oil price process parameters would require a change in the underlying fundamentals. Market expectations, extracted from call and put option prices, anticipated no change, in the short term, in the underlying fundamentals. Markets expected oil prices to remain volatile and jumpy, and with higher probabilities, to rise, rather than fall, above the expected mean.
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Oil Price Volatility and the Role of Speculation

Author: Samya Beidas-Strom,Andrea Pescatori

Publisher: International Monetary Fund

ISBN: 1498350801

Category: Business & Economics

Page: 34

View: 9264

How much does speculation contribute to oil price volatility? We revisit this contentious question by estimating a sign-restricted structural vector autoregression (SVAR). First, using a simple storage model, we show that revisions to expectations regarding oil market fundamentals and the effect of mispricing in oil derivative markets can be observationally equivalent in a SVAR model of the world oil market à la Kilian and Murphy (2013), since both imply a positive co-movement of oil prices and inventories. Second, we impose additional restrictions on the set of admissible models embodying the assumption that the impact from noise trading shocks in oil derivative markets is temporary. Our additional restrictions effectively put a bound on the contribution of speculation to short-term oil price volatility (lying between 3 and 22 percent). This estimated short-run impact is smaller than that of flow demand shocks but possibly larger than that of flow supply shocks.
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Subordinated Levy Processes and Applications to Crude Oil Options

Author: Mr. Noureddine Krichene

Publisher: International Monetary Fund

ISBN: 145190729X

Category: Business & Economics

Page: 26

View: 8010

One approach to oil markets is to treat oil as an asset, besides its role as a commodity. Speculative and nonspeculative activity by investors in the derivatives markets could be responsible for a sizable increase in oil prices. This paper recognizes both the consumption and investment aspects of crude oil and proposes Levy processes for modeling uncertainty and options pricing. Calibration to crude oil futures'' options shows high volatility of oil futures prices, fat-tailed, and right-skewed market expectations, implying a higher probability mass on crude oil prices remaining above the futures'' level. These findings support the view that demand for futures contracts by investors could lead to excessively high price volatility.
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World Economic Outlook, September 2011

Slowing Growth, Rising Risks

Author: International Monetary Fund. Research Dept.

Publisher: International Monetary Fund

ISBN: 1463997949

Category: Business & Economics

Page: 240

View: 1056

The September 2011 edition of the World Economic Outlook assesses the prospects for the global economy, which is now in a dangerous new phase. Global activity has weakened and become more uneven, confidence has fallen sharply recently, and downside risks are growing. Against a backdrop of unresolved structural fragilities, a barrage of shocks hit the international economy this year, including the devastating Japanese earthquake and tsunami, unrest in some oil-producing countries, and the major financial turbulence in the euro area. Two of the forces now shaping the global economy are high and rising commodity prices and the need for many economies to address large budget deficits. Chapter 3 examines the inflationary effects of commodity price movements and the appropriate monetary policy response. Chapter 4 explores the implications of efforts by advanced economies to restore fiscal sustainability and by emerging and developing economies to tighten fiscal policy to rebuild fiscal policy room and in some cases to restrain overheating pressures.
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Stock Market Policy Since the 1987 Crash

A Special Issue of the Journal of Financial Services Research

Author: Hans R. Stoll

Publisher: Springer Science & Business Media

ISBN: 9780792381976

Category: Business & Economics

Page: 141

View: 7363

Since the US stock market crashed on October 19, 1987, many studies have been conducted to learn from this experience in the hopes of avoiding a similarly adverse future fall. The book, originally published as a special issue of the Journal of Financial Services Research, considers some of the important policy adjustments that have been implemented in the wake of the 1987 crash. Taken separately and together, these five papers offer a synthesis and summary of the most important policy innovations that have evolved since the largest single-day decline in stock market history.
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Crude Oil Prices: Trends and Forecast (EPub)

Author: Mr. Noureddine Krichene

Publisher: International Monetary Fund

ISBN: 1451996373

Category: Business & Economics

Page: 20

View: 5510

Following record low interest rates and fast depreciating U.S. dollar, crude oil prices became under rising pressure and seemed boundless. Oil price process parameters changed drastically in 2003M5-2007M10 toward consistently rising prices. Short-term forecasting would imply persistence of observed trends, as market fundamentals and underlying monetary policies were supportive of these trends. Market expectations derived from option prices anticipated further surge in oil prices and allowed significant probability for right tail events. Given explosive trends in other commodities prices, depreciating currencies, and weakening financial conditions, recent trends in oil prices might not persist further without triggering world economic recession, regressive oil supply, as oil producers became wary about inflation. Restoring stable oil markets, through restraining monetary policy, is essential for durable growth and price stability.
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Angst

Author: Robert Harris

Publisher: Heyne Verlag

ISBN: 3641070554

Category: Fiction

Page: 384

View: 2188

Der beklemmend aktuelle Thriller von Bestsellergarant Robert Harris Für die Öffentlichkeit ist er ein Unbekannter, aber in den geheimen inneren Zirkeln der Superreichen ist Alex Hoffmann eine lebende Legende – ein visionärer Wissenschaftler, der eine Software entwickelt hat, die an den Börsen der Welt Milliardengewinne erzielt. Nun hat es jemand auf ihn abgesehen, und es beginnt für ihn eine albtraumhafte Zeit aus Angst und Schrecken. Kann er die Geister, die er rief, wieder loswerden? Oder stürzt er unaufhaltbar in den Abgrund – und mit ihm die Finanzmärkte der Welt?
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Global and Regional Spillovers to GCC Equity Markets

Author: Tahsin Saadi Sedik,Mr. Oral Williams

Publisher: International Monetary Fund

ISBN: 1455266477

Category: Business & Economics

Page: 26

View: 3710

This paper analyzes the impact of global and regional spillovers to GCC equity markets. GCC equity markets were impacted by spillovers from U.S. equity markets despite varying degrees of foreign participation. Spillovers from regional equity markets were also important but the magnitude of the effects were on average smaller than that from mature markets. The results also illustrated episodes of contagion in particular during the recent global financial crisis. The findings suggest that given the degree of openness, and open capital accounts the financial channel is an important source through which volatility is transmitted. In this regard, GCC equity markets are not immune from global and regional financial shocks. These findings refute the notion of decoupling between the GCC equity and global equity markets.
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Managing Regional Energy Vulnerabilities in East Asia

Case Studies

Author: Daojiong Zha

Publisher: Routledge

ISBN: 1136206701

Category: Political Science

Page: 192

View: 4351

This book examines East Asia’s inter-state collaborative energy projects to address energy vulnerability. It focuses on projects that have demonstrated effectiveness in addressing vulnerabilities faced by the ten states of the Association of Southeast Asian Nations and China, Japan, and South Korea in Northeast Asia. Including case studies on uncertainties in external sources of oil and gas supply, maritime piracy, continuation of energy poverty, and geographical barriers to cross-border electricity interconnection, expert contributors highlight how collaborative energy projects have been more successful than the traditional state rivalry in energy-related issues. The book develops the framework of energy vulnerability, avoiding usual securitization approaches, instead examining non-traditional security conceptualizations in studying energy policies to examine how issue-specific cooperation efforts between states arise and develop. Using East Asia as a starting point, contributors introduce a framework that advances the study of international energy cooperation. Managing Regional Energy Vulnerabilities in East Asia will be of interest to students and scholars of Asian studies, sociology, development studies, and international political economy particularly the political economy of East Asia, energy and development studies, regional and global governance of energy and the environmental economics.
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A Simultaneous Equation Model for World Crude Oil and Natural Gas Markets

Author: Noureddine Krichene

Publisher: International Monetary Fund

ISBN: N.A

Category: Foreign exchange rates

Page: 24

View: 3510

A model for world crude oil and natural gas markets is estimated. It confirms low price and high income elasticities of demand for both crude oil and natural gas, which explains the market power of oil producers and price volatility following shocks. The paper establishes a relationship between oil prices, changes in the nominal effective exchange rate (NEER) of the U.S. dollar, and the U.S. interest rates, thereby identifying demand shocks arising from monetary policy. Both interest rates and the NEER are shown to influence crude prices inversely. The results imply that crude oil prices should be included in the policy rule equation of an inflation targeting model.
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Options and the Volatility Risk Premium

Author: Jared Woodard

Publisher: Pearson Education

ISBN: 9780132756129

Category: Business & Economics

Page: 15

View: 3652

Master the new edge in options trades: the hidden volatility risk premium that exists in options for every major asset class. One of the most exciting areas of recent financial research has been the study of how the volatility implied by option prices relates to the volatility exhibited by their underlying assets. Here, I’ll explain the concept of the volatility risk premium, present evidence for its presence in options on every major asset class, and show how to estimate, predict, and trade on it....
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