Low Oil Prices
Low Oil Prices
Oil prices on global markets have plunged from United States (U.S.) $115 per barrel in mid-June of 2014 to U.S. $48 at end-January 2015, while other fuel prices have continued the slow downward trend of recent years. The rapid decline in oil prices by about 60 percent was accompanied by U.S. dollar appreciation against the major global currencies (except the Swiss franc), partly offsetting the oil price decline measured in currencies other than the dollar. The impact assessment of the oil price shock was conducted using a multi-county, multi-sector computable general equilibrium (CGE) model, PLACE, maintained by the Center for Climate Policy Analysis (CCPA). The effects of a permanent 60 percent oil price shock are assessed against a baseline scenario through 2020 based on the International Energy Agency (IEA) 2012 world energy outlook assuming a high oil price scenario of U.S. $118 in 2015 and U.S. $128 in 2020 (both in 2010 constant prices) and correlated price changes of coal (by 50 percent), and natural gas (by 30 percent). Model simulations show that, first, oil exporters will suffer substantial double-digit welfare losses through 2020 due to significant deterioration in their terms of trade. Second, the European Union (EU), as a large oil importer, will benefit significantly from lower oil prices, with the new member states being relatively better off, as a consequence of their relatively high energy intensity. Third, if the assumed permanent oil price shock occurs at half the level of the headline 60 percent scenario (proxying for U.S. dollar appreciation or reflecting a rebound in oil prices from their early 2015 levels through 2020), welfare effects will be smaller and less than proportional for most countries. Finally, in the EU, the existing emissions cap constrain the use of cheaper fossil fuels and limits the welfare increase by about 0.5 percentage points. The interpretation of results from the CGE model has been supported by regression, attributing the diversity of the simulated welfare effects by region to certain characteristics of regional economies, such as refined oil products-to- gross domestic product (GDP) and net exports of crude oil-to-GDP ratios.
- World Bank United States
HIGH ENERGY INTENSITY, TAX RATES, NET OIL, CHEMICAL INDUSTRY, SHADOW PRICE, POLICY SCENARIO, ECONOMIC GROWTH, GASES, APPROACH, ALLOCATION, FOSSIL FUEL IMPORTS, OIL EXPORTERS, CLIMATE POLICIES, WATER, OIL SUPPLY, LOWER COSTS, NATURAL GAS OUTPUT, SUPPLY SIDE, EMISSIONS, FOSSIL, INCOME, CRUDE OIL, OIL PRODUCERS, SUBSTITUTION, FINANCIAL CRISIS, PRICES OF COAL, ENERGY OUTLOOK, OIL, SCENARIOS, COAL USE, GAS, BALANCE, ACTIVITIES, GAS OUTPUT, FOSSIL FUELS, ABATEMENT, OIL IMPORTS, OIL USE, OIL DEMAND, MARGINAL ABATEMENT, 330, LABOR SUPPLY, FINANCIAL MARKETS, FUEL EXTRACTION, MODELS, NATURAL GAS PRICES, BALANCE OF PAYMENTS, EMISSION PRICING, ABATEMENT COSTS, MARKETS, FINANCE, COMBUSTION, OIL PRODUCTS, PRICES, DRILLING, PETROLEUM, CARBON EMISSIONS, ENERGY DEMAND, MONETARY POLICY, GAS PRODUCTION, OIL PRICE SCENARIO, CARBON PRICE, ENERGY GOODS, CONSUMPTION, LOWER PRICES, EMISSIONS ABATEMENT, PRICE INCREASE, REFINED PRODUCTS, RELATIVE PRICES, CANE, MARKET, DRILLING ACTIVITY, OIL DRILLING, FOSSIL FUEL, SUPPLY, GAS PRICES, FUEL SUBSTITUTION, ECONOMIC ADJUSTMENT, CARBON TECHNOLOGIES, STEAM COAL, GENERATION, ENERGY MIX, ENERGY POLICY, DEMAND, ECONOMIC ACTIVITY, CARBON PRICES, FUEL, ELECTRICITY, BIOMASS, ENERGY, COAL, ENERGY INTENSITY, FUEL PRICES, OIL CONSUMPTION, VALUE, ALTERNATIVE ENERGY, GENERAL EQUILIBRIUM MODEL, EMISSIONS FROM COAL, POLICIES, F- GASES, HEAT GENERATION, POLICY, SUPPLY OF CRUDE, ECONOMIC IMPACT, OIL PRICES, REFINED PETROLEUM PRODUCTS, EXCHANGE RATE, VEHICLES, OUTPUT DECLINES, ENERGY USE, ENERGY PRICES, INSURANCE, PRICE, END-USER PRICE, CLIMATE POLICY, FUELS, OIL SECTOR, POWER, GAS EXTRACTION, HEAT, DOMINANT FUEL, IMPORTS, OIL SHOCKS, FOSSIL FUEL PRICES, NATURAL GAS, GASEOUS FUELS, SUGAR CANE, CEMENT, IMPORT PRICES, COMMODITY MARKETS, BENEFITS, CARBON TAX, OIL PRICE, CAPS, ANIMAL PRODUCTS, ESP, OILS, REAL ESTATE, SUPPLY CURVE, EMISSION TARGETS, EMISSION CONSTRAINTS, AVAILABILITY, GAS DISTRIBUTION, POLICY ANALYSIS, RELATIVE PRICE, OIL PRODUCTION, PRICE OF OIL, COAL PRICES, CLIMATE, PRICES OF ENERGY, REVENUES, GAS PRICE, CARBON CAP, ENERGY SOURCES, EMISSION, PETROLEUM PRODUCTS
HIGH ENERGY INTENSITY, TAX RATES, NET OIL, CHEMICAL INDUSTRY, SHADOW PRICE, POLICY SCENARIO, ECONOMIC GROWTH, GASES, APPROACH, ALLOCATION, FOSSIL FUEL IMPORTS, OIL EXPORTERS, CLIMATE POLICIES, WATER, OIL SUPPLY, LOWER COSTS, NATURAL GAS OUTPUT, SUPPLY SIDE, EMISSIONS, FOSSIL, INCOME, CRUDE OIL, OIL PRODUCERS, SUBSTITUTION, FINANCIAL CRISIS, PRICES OF COAL, ENERGY OUTLOOK, OIL, SCENARIOS, COAL USE, GAS, BALANCE, ACTIVITIES, GAS OUTPUT, FOSSIL FUELS, ABATEMENT, OIL IMPORTS, OIL USE, OIL DEMAND, MARGINAL ABATEMENT, 330, LABOR SUPPLY, FINANCIAL MARKETS, FUEL EXTRACTION, MODELS, NATURAL GAS PRICES, BALANCE OF PAYMENTS, EMISSION PRICING, ABATEMENT COSTS, MARKETS, FINANCE, COMBUSTION, OIL PRODUCTS, PRICES, DRILLING, PETROLEUM, CARBON EMISSIONS, ENERGY DEMAND, MONETARY POLICY, GAS PRODUCTION, OIL PRICE SCENARIO, CARBON PRICE, ENERGY GOODS, CONSUMPTION, LOWER PRICES, EMISSIONS ABATEMENT, PRICE INCREASE, REFINED PRODUCTS, RELATIVE PRICES, CANE, MARKET, DRILLING ACTIVITY, OIL DRILLING, FOSSIL FUEL, SUPPLY, GAS PRICES, FUEL SUBSTITUTION, ECONOMIC ADJUSTMENT, CARBON TECHNOLOGIES, STEAM COAL, GENERATION, ENERGY MIX, ENERGY POLICY, DEMAND, ECONOMIC ACTIVITY, CARBON PRICES, FUEL, ELECTRICITY, BIOMASS, ENERGY, COAL, ENERGY INTENSITY, FUEL PRICES, OIL CONSUMPTION, VALUE, ALTERNATIVE ENERGY, GENERAL EQUILIBRIUM MODEL, EMISSIONS FROM COAL, POLICIES, F- GASES, HEAT GENERATION, POLICY, SUPPLY OF CRUDE, ECONOMIC IMPACT, OIL PRICES, REFINED PETROLEUM PRODUCTS, EXCHANGE RATE, VEHICLES, OUTPUT DECLINES, ENERGY USE, ENERGY PRICES, INSURANCE, PRICE, END-USER PRICE, CLIMATE POLICY, FUELS, OIL SECTOR, POWER, GAS EXTRACTION, HEAT, DOMINANT FUEL, IMPORTS, OIL SHOCKS, FOSSIL FUEL PRICES, NATURAL GAS, GASEOUS FUELS, SUGAR CANE, CEMENT, IMPORT PRICES, COMMODITY MARKETS, BENEFITS, CARBON TAX, OIL PRICE, CAPS, ANIMAL PRODUCTS, ESP, OILS, REAL ESTATE, SUPPLY CURVE, EMISSION TARGETS, EMISSION CONSTRAINTS, AVAILABILITY, GAS DISTRIBUTION, POLICY ANALYSIS, RELATIVE PRICE, OIL PRODUCTION, PRICE OF OIL, COAL PRICES, CLIMATE, PRICES OF ENERGY, REVENUES, GAS PRICE, CARBON CAP, ENERGY SOURCES, EMISSION, PETROLEUM PRODUCTS
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