Papers by Marcelo Sanchez
Energy Journal, 2004
We assess claims that OPEC's ability to influence real oil prices has diminished and that the rel... more We assess claims that OPEC's ability to influence real oil prices has diminished and that the relationship between real oil prices and OPEC production can be used to test competing hypotheses about OPEC behavior. An econometric analysis indicates that there is a statistically significant relationship among real oil prices, OPEC capacity utilization, OPEC quotas, the degree to which OPEC exceeds these production quotas, and OECD stocks of crude oil. These variables "Granger cause" real oil prices but real oil prices do not "Granger cause" these variables. These results imply that OPEC influences oil prices and that previous models cannot be used to test competing models for OPEC production behavior. The effect of OECD oil stocks on real oil prices indicates that there may be an important externality in private decisions regarding optimal crude oil stocks.
Energy Policy, 2007
This paper describes a structural econometric model of the world oil market intended to be used t... more This paper describes a structural econometric model of the world oil market intended to be used to assess oil price developments and to provide quantitative analyses of oil related risk assessments. In this model, oil demand is explained by behavioural equations that relate demand to domestic activity and the real price of oil. Oil supply for non-OPEC producers is derived from a competitive behaviour, taking into account the effect of geological and economic variables. Oil prices are defined by a "price rule" based on changes in market conditions and OPEC behaviour. In particular, OPEC acts according to a co-operative behaviour and ensures the global equilibrium at the price determined by the price rule. Insample simulation results show that the model satisfactorily reproduces past developments in oil markets. Policy simulations show that the responses of demand and non-OPEC supply are rather inelastic to changes in price. Finally, although OPEC is assumed to "close" the model by absorbing any excess in supply or demand, the model shows that OPEC decisions about quota and capacity utilisation have a significant, immediate impact on oil price.
Energy Journal, 2004
We assess claims that OPEC's ability to influence real oil prices has diminished and that the rel... more We assess claims that OPEC's ability to influence real oil prices has diminished and that the relationship between real oil prices and OPEC production can be used to test competing hypotheses about OPEC behavior. An econometric analysis indicates that there is a statistically significant relationship among real oil prices, OPEC capacity utilization, OPEC quotas, the degree to which OPEC exceeds these production quotas, and OECD stocks of crude oil. These variables "Granger cause" real oil prices but real oil prices do not "Granger cause" these variables. These results imply that OPEC influences oil prices and that previous models cannot be used to test competing models for OPEC production behavior. The effect of OECD oil stocks on real oil prices indicates that there may be an important externality in private decisions regarding optimal crude oil stocks.
Energy Policy, 2007
This paper describes a structural econometric model of the world oil market intended to be used t... more This paper describes a structural econometric model of the world oil market intended to be used to assess oil price developments and to provide quantitative analyses of oil related risk assessments. In this model, oil demand is explained by behavioural equations that relate demand to domestic activity and the real price of oil. Oil supply for non-OPEC producers is derived from a competitive behaviour, taking into account the effect of geological and economic variables. Oil prices are defined by a "price rule" based on changes in market conditions and OPEC behaviour. In particular, OPEC acts according to a co-operative behaviour and ensures the global equilibrium at the price determined by the price rule. Insample simulation results show that the model satisfactorily reproduces past developments in oil markets. Policy simulations show that the responses of demand and non-OPEC supply are rather inelastic to changes in price. Finally, although OPEC is assumed to "close" the model by absorbing any excess in supply or demand, the model shows that OPEC decisions about quota and capacity utilisation have a significant, immediate impact on oil price.
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Papers by Marcelo Sanchez