I’ve just finished a new research paper with my former student (and now University of Chicago Professor) Cynthia Wu. In our new paper, we study how increased purchases of crude oil futures contracts by financial investors may have affected the prices on those contracts.
Category Archives: energy
More thoughts on peak oil
In Saturday’s Wall Street Journal, Daniel Yergin, chairman of IHS Cambridge Energy Research Associates, gave his explanation of what’s wrong with peak oil. Here’s why I don’t find his analysis altogether convincing.
What could America be good at?
A vision of what American economic growth over the next decade could look like might also help us address our immediate economic problems.
Fundamentals, speculation, and oil prices
I was in Washington DC last week, arriving right after the earthquake and getting out of town just before Irene, to attend a conference on commodity markets at the Commodity Futures Trading Commission. Here are some of the remarks I made at the conference on the role of speculation and fundamentals in recent oil price movements.
Where can America find more income and jobs?
In January 2008, ExxonMobil and Norway’s Statoil announced a promising discovery in the Julia Field in the Gulf of Mexico that may contain a billion barrels of oil. In October of that year, Exxon applied for a 5-year extension of the lease for time to develop a suitable development plan. To the company’s surprise, the U.S. Department of Interior denied the request in February 2009, and has continued to turn down subsequent appeals. The company has
filed a lawsuit to have the decision overturned.
Economic consequences of recent oil price changes
Earlier this year, disruptions in Libya and the resurgence of demand from the emerging economies sent oil prices up sharply, a development that many economists believe contributed to the slow growth for 2011:H1. The chaotic markets of the last few weeks saw oil prices drop back down to where they had been in December. Will that be enough to revive the struggling U.S. economy? There is some evidence suggesting that it may be too late.
Index funds and commodity prices
There has been a lot of growth over the last decade in funds that take long positions in commodity futures contracts in order to offer investors an asset that follows raw commodity prices. I’ve been looking into some of the data that have been used to measure the size of those positions.
Consumers get more worried
Reuters reported yesterday that the preliminary July reading for the Thomson Reuters/University of Michigan’s index of consumer
sentiment fell to 63.8, the lowest level in more than two years. In fact, that’s about as low as this measure ever got in the recessions of 1981-82 or 1990-91, and is well below values for the recession of 2001.
Hanging in there
Higher oil prices slowed the economy in the first half of this year. But I don’t expect things to get a whole lot worse.
Links for 2011-06-29
Some quick links to recent analyses of health care costs, oil price shocks, and forecasting commodity prices.