Lutz Kilian, 29 March 2016

Lower oil prices are putting increasing pressure on Arab oil producers, and many pundits have been quick to blame US shale oil producers for the decline in prices and in Arab oil revenues. This column measures how much the the shale oil boom contributed to the fall in the global price of crude oil. The Brent price of crude oil since 2011 would have been as much as $10 per barrel higher in the absence of US shale oil. But as large as this effect is, it pales in comparison with the decline in the price of oil that took place after June 2014, to which shale oil actually contributed little. The column goes on to discuss the policy options facing Arab oil producers.

Alexander Naumov, Gerhard Toews, 22 February 2016

The recent dramatic decline in the price of oil runs counter to the argument that oil prices should be high because of the high costs. This column presents new evidence on this relationship. Using a representative global dataset, the authors find that upstream costs follow oil prices with a time lag. In particular, a sustained 10% increase in the price of oil leads to an increase in upstream activity of about 4%, and in this way triggers a sustained 3% increase in global upstream costs after a lag of one to two years.

Richard S J Tol, 17 December 2015

The 21st Conference of the Parties (COP21) to the United Nations Framework Convention on Climate Change has successfully negotiated a Paris Agreement. International climate policy will be shaped by the events in Paris for years to come. This column highlights three key developments.

Christopher R. Knittel, Kostas Metaxoglou, André Trindade, 04 December 2015

The recent shale boom has led to a change in the relative price of fossil fuels, which could have an impact on the electricity sector. This column looks at the decision of electricity generators to switch from coal to gas in response to changes in relative prices. Investor-owned utilities were more likely than independent power producers to switch from coal-fired to gas-fired generation to take advantage of lower natural gas prices. This heterogeneity in generators’ response to fuel prices has material implications for CO2 emissions.

Rabah Arezki, Adnan Mazarei, Ananthakrishnan Prasad, 29 November 2015

As a result of the oil price plunge, the major oil-exporting countries are facing budget deficits for the first time in years. This column goes through the evidence, suggesting that the low price environment is likely to test the relationship between governments in oil-exporting countries and their sovereign wealth funds, at a time when spending is going up.

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