Oil inventory behavior: an empirical analysis of public-private interaction

Book · Sat Jan 01 04:00:00 EST 1983

OSTI ID:5879078

Hubbard, R G; Weiner, R

Proposals for government action to fight an oil supply disruption tend to reflect varying preceptions of the problem. This paper starts from the observation that the rapid increases in the price of crude oil during two of the last three supply disruptions can be attributed in part to increased private inventory demand, which was stimulated by expectations of still higher prices (and hence speculative profits) in the future. In formulating policy, prospective intervenors must bear in mind that private inventory accumulation is likely to accompany an unexpected oil supply cutback. These considerations are particularly important in examining Strategic Petroleum Reserve (SPR) releases, the Reagan Administration's intervention of choice. After all, the SPR constitutes but a small fraction of US inventories; the bulk of the rest is controlled by the petroleum industry, which is free to build or draw as it sees fit. Government stock policy will be impotent if SPR releases are fully absorbed in private inventories. Goals in this paper are two. First, a model is required of private inventory behavior which both fits past data reasonably well and is robust enough to be useful for policy analysis. Second, this model is incorporated into a larger system in order to examine a supply disruption and its effects on prices and inventory levels. 15 references, 1 figure, 7 tables.

• OSTI ID: 5879078
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
020700* -- Petroleum-- Economics
Industrial
& Business Aspects
021000 -- Petroleum-- Legislation & Regulations
29 ENERGY PLANNING, POLICY, AND ECONOMY
293000 -- Energy Planning & Policy-- Policy
Legislation
& Regulation
294002 -- Energy Planning & Policy-- Petroleum
DRAWDOWN
ENERGY MODELS
ENERGY POLICY
ENERGY SOURCES
FOSSIL FUELS
FUELS
GOVERNMENT POLICIES
INVENTORIES
NORTH AMERICA
PETROLEUM
RESERVES
RESOURCES
STRATEGIC PETROLEUM RESERVE
SUPPLY DISRUPTION
USA