Evaluating a Year of Oil Price Volatility--论文代写范文精选

最近一段时期的价格波动并不是唯一的。石油价格也下降了50%以上，然而在大衰退期间下降，主要是由于全球经济活动明显放缓。在此期间大宗商品的价格,例如铜，2014年再次下跌,但远不及石油价格的程度。下面的essay代写范文进行详述。

Abstract
Over the last 14 months, the average price of oil has fallen by about 60 percent. Oil prices fluctuate for a number of reasons. Rising global economic activity can increase demand and push prices higher, while rising production rates can cause prices to decline. Although simple supply and demand stories are useful in describing oil price movements, the factors driving such changes are often difficult to identify. As a result, large swings in oil prices can come as a surprise, as was the case with the recent decline starting in mid-2014. The recent period of price volatility is not unique. Oil prices also fell by over 50 percent during the Great Recession of 2007-09. 

However, the price decline during the Great Recession was due primarily to a pronounced slowdown in global economic activity. Soft global demand during this period also caused prices for commodities other than oil to fall sharply. Prices for some of these commodities, such as copper, fell again in 2014, but nowhere near the extent of oil prices. These movements suggest that only a portion of the decline in 2014 is likely due to weaker global economic activity. Increasing supply may be another explanation for the oil price decline that started in 2014. Total global oil production increased 3.7 percent year over year as of December 2014. This increase is on the higher side, though not remarkable by the standards of the past five years.

Because oil is a storable commodity, changes in inventories can also drive oil price movements. In particular, changes driven by expectations of future supply relative to demand could change market participants’ desire to hold inventory. In this context, “precautionary demand” can play an important role in oil price movements. Precautionary demand can be driven by sectors of the energy industry that have a direct use for crude oil, such as those involved in the refining business. 

These sectors then need to balance expectations of future oil prices with the availability and cost of storage. For example, news that future production will likely continue at a high level can cause precautionary demand for crude oil to fall. As a result, the price of oil may decline, but not due to a slowing of global economic activity or a sudden increase in the current supply. In this paper, we find shifts in precautionary demand specific to the oil sector played the primary role in driving oil prices lower from mid-2014 to mid-2015. Section I of the article reviews possible sources of the oil price decline. Section II analyzes demand and supply factors using two different empirical approaches. Section III interprets the oil-specific demand factors and finds shifts in expectations of global economic growth and global oil supply have played major roles in the oil price decline since mid-2014.

The Global Developments Affecting Oil Prices 
Crude oil prices fell sharply in the second half of 2014 after a period of relative stability, generating concerns about the source of the decline. Chart 1 shows oil prices reached a post-recession peak in 2011, remained relatively stable for a few years, and then declined about 50 percent in the second half of 2014.1 In the first half of 2015, prices were again volatile, reaching a multiyear low in March before rising about 40 percent through mid-June. These gains reversed as prices fell back to multiyear lows by mid-August. Overall, from the peak in mid-2014 to August 2015, prices fell by about 60 percent. In general, the world experienced some important changes in both current supply and demand over this period, as well as changes in global oil markets that affected expectations about future conditions.

Global oil demand developments 
Fluctuations in global growth and oil demand are one possible explanation for oil price volatility. However, if worldwide aggregate demand were the primary factor, other commodity prices would have likely displayed similar patterns. For example, Chart 1 shows copper prices and an index of industrial metal prices reached a post-recession peak in 2011 and have trended lower over the past few years. In general, commodity prices shared some of the same recent patterns as oil, but exhibited far less dramatic movements. In addition, Chart 2 shows world real GDP growth slowed in 2012 from its 2010 rate. Slowing global growth may have exerted downward pressure on commodity prices after 2011. 

But the slowdown in growth was relatively modest, and from 2011 until 2014, global oil demand actually increased. As a result, oil prices remained relatively stable until mid-2014. Since mid- 2014, industrial metal prices also fell faster than their previous trend, but by far less than oil. These observations suggest that while changes in global growth may have played some factor in the oil price movements since mid-2014, they are unlikely to be the primary factor. Global oil demand may have played more of a role in affecting oil prices in the first half of 2015. Oil price increases from March through June coincided with an improving outlook, partly from stabilizing conditions in Europe. 

However, global growth expectations again softened in July and August of 2015, likely reflecting concerns about growth in China, one of the largest consumers of oil. Still, the shifts in growth in various regions of the world were relatively modest and, on their own, offer a somewhat incomplete explanation for the observed volatility in oil prices. Another possible explanation for oil price volatility is the growing foreign exchange value of the U.S. dollar. Akram presents evidence that a stronger dollar has historically been associated with declining oil prices. The rise in the dollar’s value against other major currencies was substantial in the second half of 2014 and was a possible factor contributing to the declining price of oil. Oil is priced in U.S. dollars, so the decline of other currencies relative to the dollar makes oil more expensive for non-U.S. consumers. As a result, non-U.S. consumers may reduce demand for oil and thereby cause prices to soften. Through this channel, however, a stronger U.S. dollar by itself may not be the factor driving a change in oil prices. Instead, it may simply reflect changing global economic conditions.2 In general, disentangling an independent effect of the U.S. dollar on oil prices is challenging. Furthermore, the correlation between the U.S. dollar and oil prices has changed over time.3

Global oil supply developments 
Changing global oil supply conditions offer another possible explanation for the substantial swings in oil prices since mid-2014. U.S. production increased remarkably from 2011 to 2013 and continued to rise unexpectedly throughout 2014, contributing significantly to global oil production gains. For example, Chart 3 shows the Energy Information Administration (EIA) repeatedly revised up its projections for U.S. production throughout 2014. More broadly, Chart 4 shows the cumulative increase in U.S. production since January 2010 left U.S. output four million barrels per day higher in January 2015 compared with five years earlier. The rest of the world also experienced some significant, unexpected supply-side developments after mid-2014. Chart 4 shows unplanned OPEC production outages kept increasing until about mid-2014, largely due to unrest in Libya, Iran, Iraq, and Nigeria, and mostly offset increasing U.S. production. In the second half of 2014, however, Middle East supply disruptions were less prevalent or did not affect production as would have been expected. 

For example, production in Libya and Iraq increased despite unrest in both countries. Chart 5 shows the contribution from Libya was particularly significant in the third quarter of 2014, as production increased from around 0.2 million barrels per day in June to about 0.9 million barrels per day in October. Although Libyan production decreased at the end of 2014, an increase in Iraq production helped offset the decline. Two announcements regarding expectations of future oil supply also affected energy markets significantly. In late November, OPEC announced a decision to maintain production at a level of about 30 million barrels per day, signaling something of a change in its objectives. Saudi Arabia, traditionally viewed as the swing producer, chose not to cut production and instead continued adding to already oversupplied markets. 

The second announcement was a nuclear deal with Iran that would lift oil-related economic sanctions, which coincided with oil prices somewhat stabilizing by the middle of 2015. The announcement of a nuclear deal suggested that another major oil producer may soon come online, and added to the prospect of oil being oversupplied in what was already a low-price environment. In all, developments on the supply side of global oil markets appear to offer a potentially better explanation for recent price volatility than fluctuations in global growth. Of course, supply also responds to changes in oil prices. For example, drilling activity in the United States declined sharply in response to lower oil prices toward the end of 2014. The total number of rig counts dropped by about 60 percent from October 2014 to June 2015, though U.S. oil production has been affected only recently. For some time following the drop in rigs, U.S. production kept rising due to efficiency gains. In addition, Chart 5 shows OPEC producers, particularly Saudi Arabia, again increased production in the first part of 2015, bringing yet more oil to already oversupplied markets.

Overall, softening oil demand and rising oil production were likely important factors behind the decline in oil prices since mid-2014. However, whether they can fully account for the decline is not readily apparent. The next sections turn to frameworks that can better attribute these different factors to their effect on oil prices as well as incorporate the effect expectations about future conditions have on prices.

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