RIR_Vol 12 N 01

Permanent URI for this collectionhttps://archives.univ-eloued.dz/handle/123456789/19460

Browse

Browsing RIR_Vol 12 N 01 by Author "Sadallah, Daoud"

Filter results by typing the first few letters
Now showing 1 - 1 of 1
  • No Thumbnail Available
    Item
    Negative Futures Crude Prices: Correlation Of Opec-plus Supply And Existing Vlccs-fpsos & Onshore Storage Indifferences
    (جامعة الوادي - University of Eloued, 2022-06-30) Sadallah, Daoud
    This essay attempts to explain different interactions of crude market agents that have originated negative oil price in 2020, as well as storage capacity conditions in net oil importing countries, OPEC-Plus supply agreement, ETFs traders behavior in crude market and their implications on futures crude contract price. We analyzed Contango conditions of crude market that sent oil prices below zero for futures contract, and modeled both demands on onshore storage capacity and FPSOs and VLCCs. Empirical results show that OPEC-Plus market share targeted shock explained 75% of futures crude contract negative prices rather than COVID-19 demand decline. We underlined that oil stockpiles marginal cost would replace price-cost divergence for futures delivery in oligopolistic and perfect competition. Finally, we emphasized the proposition of OPEC-Plus producers could act as Stackelberg leaders by regulating short run outputs quotas.