Closer to One Great Pool? Evidence from Structural Breaks in Oil Price Differentials

Plante, Michael; Strickler, Grant

doi:10.24149/wp1901

Cited by 5 publications

(2 citation statements)

References 15 publications

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“…Competitors often relied on the collapse of the US shale oil industry when prices fell below the 90 th level, which did not occur despite constant price fluctuations. During 2015-2019, the break-even price decreased to $ 73 a barrel in 2014, then to $ 60 in 2015 (Kapustin and Grushevenko, 2018), and between 48 and 52 on average after 2017 (Plante and Patel, 2019).…”

Section: Breakeven Price 1 Of Us Shale Oil Productionmentioning

confidence: 99%

The Effect of US Shale Oil Production on Local and International Oil Markets

Rodhan

2023

IJEEP

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US shale oil has created dramatic changes in international oil markets. The United States became the world's biggest producer of crude oil after it overtook Saudi Arabia and Russia and then returned to exporting crude oil after a stop that lasted more than four decades. Its imports of crude oil decreased significantly. US shale oil had a remarkable impact on the structure of international crude oil trade; Other producers, including OPEC, were affected by the decline in their shares in the global oil market and the decline in their financial revenues. Technological development has played an essential role in the success of US shale oil by reducing costs and increasing economic feasibility. Therefore, US shale oil is no longer highly sensitive to lower oil prices, as it was before. Furthermore, the continuous increase in crude oil prices from $24.4 per barrel in 2001 to $97 and $111.6 in 2008 and 2012, respectively, was enough to make shale oil production economically profitable. Now, the United States plays an essential role in the global oil market, as the largest consumer and producer and, behind China, the second largest importer. Shale oil is expected to play a growing role in the US oil sector and the global oil industry in the future.

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Section: Breakeven Price 1 Of Us Shale Oil Productionmentioning

confidence: 99%

The Effect of US Shale Oil Production on Local and International Oil Markets

Rodhan

2023

IJEEP

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“…API gravity is an inverse measure of petroleum liquid density relative to water, and a higher value implies a better grade of the crudes. Plante and Strickler (2021) argue that spot crude oils of different qualities tend to move together, and their price differentials have generally become smaller over time. The API values of the eight deliverable spot crudes vary from 24.2 (Shengli) to 40.2 (Murban).…”

Section: Determinants Of the Dynamic Price Discovery Processmentioning

confidence: 99%

Price discovery in China's crude oil futures markets: An emerging Asian benchmark?

Yang

Webb

2022

Journal of Futures Markets

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We examine the price discovery performance of China's crude oil futures traded on the Shanghai International Energy Exchange (INE) for the spot prices of 19 types of deliverable and nondeliverable Asian crude oil. We find evidence for the INE crude oil futures price discovery function even at the early stage for almost all the deliverable crudes and some nondeliverable crudes. Both the INE crude oil futures price and the spot price significantly contribute to the price discovery process, with substantially time‐varying informational roles. While the price discovery performance was severely damaged around the period of COVID‐19 pandemic shock intensification in China with the temporary cancellation of nighttime trading, it improved to some extent after China started the recovery from the shock. But such improvement deteriorated drastically and disappeared since early 2021. Further analysis reveals that both economic fundamentals (e.g., the warehouse inventory) and trading‐related characteristics of the futures market are significant determinants of the price discovery performance. The overall findings imply that the INE crude oil futures market has evolved into a useful and important information source in pricing Asian crudes, and is on the path to emerge as an Asian benchmark.

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Return and volatility transmission between China's and international crude oil futures markets: A first look

Yang

Zhou

2020

Journal of Futures Markets

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We examine return and volatility transmission between the newly established crude oil futures in China and international major crude oil futures markets using intraday data. For the first time, we document evidence for cointegration relationships among these oil futures markets. Both China's and Oman's oil futures markets react to deviations from their long-run equilibrium with West Texas Intermediate and Brent oil futures. There is also new evidence for asymmetric volatilities and correlations across these oil futures markets. Furthermore, the Chinese oil futures have stronger linkages with the international major futures markets than Oman futures.

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Closer to One Great Pool? Evidence from Structural Breaks in Oil Price Differentials

Cited by 5 publications

References 15 publications

The Effect of US Shale Oil Production on Local and International Oil Markets

The Effect of US Shale Oil Production on Local and International Oil Markets

Price discovery in China's crude oil futures markets: An emerging Asian benchmark?

Return and volatility transmission between China's and international crude oil futures markets: A first look

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