15) The US. has run down the nation's SPB, Strategic Petroleum Reserve, to levels not seen it since March 1984! At1.0million bbls per day, what was the impact on the global oil price if there was no countermeasure employed by OPEC+? Knowing that Russian oil production has declined and is expected to be1.1million bbls per day less than prewar levels AND the 1.0 million bbls per day that are coming off the market due to the end of the SPB release-let's say in March 2023. What do you expect to happen to the price of oil?

15) The US. has run down the nation's SPB, Strategic Petroleum Reserve, to levels not seen it since March 1984! At1.0million bbls per day, what was the impact on the global oil price if there was no countermeasure employed by OPEC+? Knowing that Russian oil production has declined and is expected to be1.1million bbls per day less than prewar levels AND the 1.0 million bbls per day that are coming off the market due to the end of the SPB release-let's say in March 2023. What do you expect to happen to the price of oil?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter7A: Production Economics Of Renewable And Exhaustible Natural Resources, Advanced Material

Section: Chapter Questions

Problem 1E

See similar textbooks

Similar questions

Suppose that President Clinton has recently recommended that the U.S. should use some of the strategic oil reserves (oil stored underground and owned by the United States government) in order to solve the U.S. oil supply problem. Assume that quantity demanded in the short-run is inelastic at 1 million barrels per day. The quantity supplied (per day) is equal to 700,000 + 10,000P (where P is the price for a barrel of oil). a. What would be the current price for a barrel of oil? N b. If Clinton releases 100,000 barrels per day, what is the new equilibrium price and quantity? N c. Presidential candidate George W. Bush proposed that all states lower their gasoline tax. Assume that the gasoline tax reduction leads to a $10 decrease in the tax on a barrel of oil (i.e., supply side). What is the new price and quantity? N How much of the tax savings will be passed on to consumer through lower prices? Assume that the changes in part b. have not occurred. d. What impact do each of these two…
Suppose that President Clinton has recently recommended that the U.S. should use some of the strategic oil reserves (oil stored underground and owned by the United States government) in order to solve the U.S. oil supply problem. Assume that quantity demanded in the short-run is inelastic at 1 million barrels per day. The quantity supplied (per day) is equal to 700,000 + 10,000P (where P is the price for a barrel of oil). a. What would be the current price for a barrel of oil? N b. If Clinton releases 100,000 barrels per day, what is the new equilibrium price and quantity? N c. Presidential candidate George W. Bush proposed that all states lower their gasoline tax. Assume that the gasoline tax reduction leads to a $10 decrease in the tax on a barrel of oil (i.e., supply side). What is the new price and quantity? N How much of the tax savings will be passed on to consumer through lower prices? Assume that the changes in part b. have not occurred. d. What impact do each of these two…
Suggest plausible factors which could have an impact on the demand and supply of oil in the near term.o Argue whetheron balance these effects are expected to push oilprices up, down, or keep them stable.o Include diagrams as appropriate.
The price of oil is currently over $80 per barrel and has been as high as $90 per barrel after Saudi Arabia and a couple of oter OPEC countries reduced output this year. The demand for oil is expected to increase by 1 million barely per day over the next year according to the International Energy Agency but OPEC+ has been unclear about its intentions of increasing oil supplies. a. If OPEC+ increases its production by million barrels per day, we can unambiguously say that the equilibrium price will fall, and the equilibrium quantity will rise.
Explain what factors might have caused investor asset demand for real estate to grow in Question 2.8. Question 8 Suppose investor demand for real estate assets grows in the sense that prevailing cap rates (OARs) in the property asset market fall from 10% to 8%. Assuming usage demand remains constant in the space market, show on a four-quadrant diagram, similar to Exhibit 2-4b, the short- and long-run effects of this change in investor demand. [Hint: You can answer qualitatively or recognize that specific quantitative answers will depend on the shapes and slopes of the curves (i.e., the elasticities) in each quadrant.]
Assume that producers in Luzon can only produce 11 billion kg of palay at the time ofharvest even if price reaches PhP 30 per kg, what will be the value of their own priceelasticity of supply?
The price of crude oil increased to its highest level due to conditions which impactedsupply. Historically, crude oil has traded at between 70 and 150 USD per barrel. But theprice increased to over 200 USD in March 2022. Growing demand in Canada for crude tobe turned into refined petroleum, coupled with a sharp fall in production in Saudi Arabiahave both been factors in the price increase. Bauxite production in Saudi Arabia for 2017-18 fell 65% year-on-year due to an agreement with OPEC. The Energy InformationAdministration predicts that global consumption of crude oil is likely to be greater thanproduction by 20 million barrels this year.In the US, companies in the steel and alumina industry have put pressure on the USgovernment to relax import controls, warning that otherwise they might run out of petrol.Commentators predict that most steel and alumina producers will be unaffected becausecrude is such a small part of their spending.a. Explain, using supply and demand analysis, why…
The Energy Information Administration's forecast that world crude oil demand will likely outpace supply by 20 million barrels this year has also increased market uncertainty and driven up prices. Companies in the US steel and alumina industries have been urging the loosening of import restrictions because they fear running short of petrol. Despite the potential market effects, analysts believe that most steel and alumina companies won't be significantly impacted because crude oil only accounts for a small fraction of their overall costs. In general, rising crude oil prices are the result of a mix of supply and demand issues, market uncertainty, and other reasons. The price of this significant commodity will undoubtedly continue to be significantly influenced by global supply and demand dynamics, even though the precise trajectory of prices in the future is difficult to forecast. 1) Draw a graph to show this information.
Hula Products has reintroduced the hula hoop to the world and faces a growing demand for its product in two distinct markets: the United States and Europe. Demand in these markets is: PU = 20 - .1QU and PE = 10 - .05QE., where all quantities are expressed in thousands of units (i.e. QU = 50 means 50 thousand units). Hula can produce hoops at no cost. The maximum Hula can produce is 80 thousand hoops. How many should be sent to Europe (QE)? Enter as a value (answer should be between zero and 80).
Scenario Milk is flowing like never before in the U.S., where dairies have expanded output enough to send wholesale prices plunging from an all-time high in September. Production in the 12 months through October reached 17.08 billion pounds a month on average, up 1.8 percent from the same period a year earlier, as farmers took advantage of high milk prices and low livestock-feed costs, government data show. Two years of record corn harvests in the U.S. sent grain prices to a five-year low. Grains are mainly used as feed for cow farmers. Imports of milk to the US has also increased during the period as countries such as New Zealand are also benefiting from good market conditions During this time however, demand for the good has not been able to keep up with the supply. Notably, the current market conditions are not expected to last with impending drought conditions that would impact the harvest of corn and result in an increase in its price. With higher prices for grains some farmers…
8. For each question below, draw supply and demand curves for the corn market.Show in which direction (if any) the demand and/or supply curve is likely to shift in response tothe shock described. Clearly state or show the effect on the equilibrium price and quantity forbread.a. The government passes a bill subsidizing corn production for ethanol.b. Income in the United States and worldwide decreases.C. If both the above effects happen at the same time, what do we know aboutthe effect on equilibrium price and quantity?d.In game theory, what is a Nash equilibrium?
Consider the following scenario: In Great Britain, the electricity system operator publishes a wind generation forecast of 14 GW for 7 PM on the next day. On the morning of the next day, the electricity system operator revised its wind generation forecast for 7 PM down from 14 GW to 11 GW. Do you expect the wholesale electricity market price for 7 PM to increase or decrease at this time? Explain your answer.