Oil price forecasting using probabilistic projection of the United States dollar

2011 ◽  
Vol 51 (1) ◽  
pp. 411
Author(s):  
Noll Moriarty
Keyword(s):  
United States ◽  
Commodity Prices ◽  
The United States ◽  
Oil Price ◽  
Petroleum Exploration ◽  
Capital Expenditures ◽  
Medium Term ◽  
United States Dollar ◽  
Probabilistic Forecasts ◽  
Probabilistic Projection

Accurate forecasts for medium-term commodity prices are essential for resource companies committing to large capital expenditures. The inaccuracy of conventional forecasting methods is well known because they tend to be extrapolations of the current price trend. The inevitable reversal catches many by surprise. This paper demonstrates that medium-term (2–5 years) commodity prices are not strongly linked to economic health and commodity demand-supply, but are instead inversely controlled by supply-demand for the United States dollar (USD) and consequent valuation. P90, P50 and P10 projection bounds for future valuation of the USD are presented based on the successful probabilistic techniques of the petroleum exploration industry. This allows probabilistic projections for the oil price, which is inversely related to the USD valuation. I show that the USD is significantly undervalued at present. Probabilistic projection of the USD valuation indicates that likely appreciation will put downward pressure on commodity prices for the next 2–5 years. If the USD premise is correct, likely appreciation of the dollar during the next 2–5 years will hold stable, or even decrease, oil price to around USD $50 BBL. This is a contrary expectation to most forecasts—one which, if it eventuates, should give cause for reflection before committing to large capital expenditures. Further investigation could examine the extent to which the USD valuation can be modelled as a fractal phenomenon. If so, it would mean the USD valuation is not driven by conventional economic fundamentals; instead, it is a semi-random number series with serial correlation. If true, probabilistic forecasts of the USD can be significantly improved, hence that of medium-term commodity prices.

scholarly journals PENGARUH HARGA KOMODITAS, KURS, INFLASI, FOREIGN DIRECT INVESTMENT (FDI), DAN SUMBER DAYA MANUSIA (SDM) TERHADAP PEREKONOMIAN NEGARA OKI

2020 ◽  
Vol 7 (8) ◽  
pp. 1607
Author(s):  
Evi Aninatin Ni'matul Choiriyah ◽  
Ilmiawan Auwalin
Keyword(s):  
United States ◽  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Human Resources ◽  
Labor Force ◽  
Direct Investment ◽  
Commodity Prices ◽  
Precious Metals ◽  
The United States ◽  
United States Dollar

This study aims to determine the effect of world commodity prices on agriculture, energy, fertilizer, metals and minerals, precious metals, inflation, exchange rate of the United States Dollar (USD), Foreign Direct Investment, human resources on economics of Organization of Islamic Cooperation (OIC) which is proxied in Gross Domestic Product (GDP) in the 2009-2018 period. In this study, there are two models regarding the human resources variable, namely total population and labor force. Random Effect Model (REM) is used in this study to examine the relationship of independent variables to the dependent variable, both partially and simultaneously. The findings of this study, both the first and second models show that commodity prices in the agriculture, fertilizer, metal and mineral sectors, Foreign Direct Investment, and inflation have a negative and significant effect on the GDP of the OIC countries. Meanwhile, commodity prices in the energy sector, precious metals, and the exchange rate of the United States Dollar (USD) have a positive and significant effect on the GDP of the OIC countries. As well as the human resources variable, both the population and the labor force also have a positive and significant effect on the GDP of the OIC countries. This paper can be considered for the government or related institutions and agencies in formulating policies or regulations to improve and maintain economic stability in each OIC member country.Keywords: Macroeconomics, World commodities prices, OIC, and GDP

scholarly journals A Comparative Survey Of Capital Investment Decision Practices In The United States And The United Kingdom

2011 ◽  
Vol 1 (11) ◽  
Author(s):  
Thomas Klammer ◽  
Neil Wilner ◽  
Jan Smolarski
Keyword(s):  
United States ◽  
Risk Management ◽  
United Kingdom ◽  
The United States ◽  
Capital Expenditures ◽  
The United Kingdom ◽  
Management Techniques ◽  
Comparative Survey ◽  
The Uk

Capital expenditures can be crucial to firms long-term success, especially in a complex global environment. As companies increasingly compete in the global market place, it is important to study project evaluation processes from an international perspective. Capital investments involve substantial monetary commitments and risks that affect long-term firm profitability and influence capital allocation decisions in the future. Survey research in the area of capital expenditure analysis has been extensively done in both the United States [US] and the United Kingdom [UK]. This research is the first comparative survey of practices in both countries that we are aware of. A direct comparison of the use of project evaluation, management science, and risk management techniques in the two countries is made. The survey instrument used is an adaptation of the Klammer [1970] instrument that has been used repeatedly in surveys of American firms. This is the first time that it has been applied to British firms. The use of a common instrument allows for more meaningful comparisons. The samples consisted of 127 American and 59 British firms with sales of at least $100 million and capital expenditures of at least $10 million. Preliminary results indicate a continued extensive use of discounted cash flow techniques by US firms. Techniques such as payback or urgency continue to be used, but to a lesser degree than discounting. Firms in the UK also make extensive use of discounting but do so to a lesser degree than their American counterparts. Payback is widely used in the UK. Risk management techniques are widely used in both countries, with sensitivity analysis being the most popular technique in both countries. Extensive use of technical and administrative procedures, such as detailed budgets, standardized forms and post-audits, are evidenced in both countries. The paper offers reasons that have to do with organizational structure and form, as well as market differences, to explain our results.

scholarly journals “Shale Revolution” in the United States as the Main Driver of the World Oil Market Transformation

2019 ◽  
Vol 12 (6) ◽  
pp. 71-93
Author(s):  
S. A. Zolina ◽  
I. A. Kopytin ◽  
O. B. Reznikova
Keyword(s):  
United States ◽  
Crude Oil ◽  
Oil Production ◽  
The United States ◽  
Oil Price ◽  
Oil Market ◽  
Oil Exports ◽  
The World ◽  
Oil Sector ◽  
The U.S

In 2018 the United States surpassed Saudi Arabia and Russia to become the largest world oil producer. The article focuses on the mechanisms through which the American shale revolution increasingly impacts functioning of the world oil market. The authors show that this impact is translated to the world oil market mainly through the trade and price channels. Lifting the ban on crude oil exports in December 2015 allowed the United States to increase rapidly supply of crude oil to the world oil market, the country’s share in the world crude oil exports reached 4,4% in 2018 and continues to rise. The U.S. share in the world petroleum products exports, on which the American oil sector places the main stake, reached 18%. In parallel with increasing oil production the U.S. considerably shrank crude oil import that forced many oil exporters to reorient to other markets. Due to high elasticity of tight oil production to the oil price increases oil from the U.S. has started to constrain the world oil price from above. According to the majority of authoritative forecasts, oil production in the U.S. will continue to increase at least until 2025. Since 2017 the tendency to the increasing expansion of supermajors into American unconventional oil sector has become noticeable, what will contribute to further strengthening of the U.S. position in the world oil market and accelerate its restructuring.  

Oil price-inflation pass-through in the United States over 1871 to 2018: A wavelet coherency analysis

2019 ◽  
Vol 50 ◽  
pp. 51-55 ◽  
Author(s):  
Aviral Kumar Tiwari ◽  
Juncal Cunado ◽  
Abdulnasser Hatemi-J ◽  
Rangan Gupta
Keyword(s):  
United States ◽  
The United States ◽  
Oil Price ◽  
Price Inflation ◽  
Pass Through ◽  
Wavelet Coherency

Wholesale Commodity Prices in the United States, 1700–1861

1939 ◽  
Vol 49 (Supplement_1) ◽  
pp. 283-285
Author(s):  
Norman J. Silberling
Keyword(s):  
United States ◽  
Commodity Prices ◽  
The United States
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