OPEC and Non-OPEC Oil Production and the Global Economy

descriptionPublicationkeyboard_double_arrow_right Article , Other literature type , Preprint 01 Jan 2014 English Publisher:Elsevier BVJournal:SSRN Electronic Journal (eissn: 1556-5068,

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Authors: Ratti, Ronald A. (R13437); Vespignani, Joaquin L.;

doi: 10.2139/ssrn.2519297 , 10.2139/ssrn.5277787 , 10.1016/j.eneco.2014.12.001

handle: 1959.7/uws:31302

OPEC and Non-OPEC Oil Production and the Global Economy

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Abstract

AbstractHamilton identifies 1973 to 1996 as “the age of OPEC” and 1997 to the present as “a new industrial age.” During 1974–1996 growth in non-OPEC oil production Granger causes growth in OPEC oil production. OPEC oil production decreases significantly with positive shocks to non-OPEC oil production in the earlier period, but does not do so in the “new industrial age”. In the “new industrial age” OPEC oil production rises significantly with an increase in oil prices, unlike during “the age of OPEC” period. OPEC oil production responds significantly to positive innovations in global GDP throughout. Over 1997:Q1–2012:Q4 the negative effect on real oil price of positive shocks to non-OPEC oil production is larger in absolute value than that of positive shocks to OPEC oil production. The cumulative effects of structural shocks to non-OPEC oil production and to real oil price on OPEC oil production are large. The cumulative effects of structural shocks to OPEC production and real oil price on non-OPEC production are small. Results are robust to changes in model specification. An econometric technique to predict growth in OPEC oil production provides support for the results from the SVAR analysis. Results are consistent with important changes in the global oil market.

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Keywords

Economics and Econometrics, global economics, OPEC production, Organization of Petroleum Exporting Countries, petroleum industry and trade, Energy(all), Global oil market, 140212 - Macroeconomics (incl. Monetary and Fiscal Theory), Oil price, Non-OPEC, prices, OPEC production, non-OPEC, oil Price, global oil market, jel: jel:E32, jel: jel:E10, jel: jel:E31, jel: jel:Q4, jel: jel:Q43, jel: jel:E0, jel: jel:E1

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