Investment in New Proved Oil Reserves: An Austrian Perspective

2017 ◽  
Vol 12 (s1) ◽  
Author(s):  
Bradley T. Ewing ◽  
Mark Thornton ◽  
Mark Yanochik
Keyword(s):  
Time Series ◽  
Interest Rates ◽  
Financial Time Series ◽  
Commodity Prices ◽  
Asset Markets ◽  
Oil Reserves ◽  
Econometric Methods ◽  
Low Interest Rates ◽  
Treasury Bond ◽  
Exploration And Production

AbstractExploration and production (E&P) companies must replace oil produced with new proved reserves in order to sustain their existence, generate future revenues and value. Extensions constitute the largest type of additions to new proved reserves. Adding reserves through extensions is capital intensive and both the real price of oil (represented by real refiner acquisition cost) and real interest (represented by real yield on 10 year Treasury bond) will influence the investment in new discoveries of proved reserves. However, recent periods of unusually high commodity prices and ultra-low interest rates, often linked to monetary policy, may have led to an over-investment in reserves through extensions. Accordingly, using U.S. data (1977–2014) we test for the existence of “explosive behavior” in the volume of extensions over time with financial time series econometric methods referred to as right-tail ADF tests which have traditionally been used for identifying speculative bubbles in asset markets. Empirical evidence identifies a period of explosive (“bubble-like”) behavior in the time series of extensions having occurred beginning 2010 through 2014. This research provides an Austrian explanation for the empirical results consistent with the notion of malinvestment.

scholarly journals IMPLEMENTASI METODE FUZZY TIME SERIES DENGAN MODEL ALGORITMA CHEN UNTUK MEMPREDIKSI HARGA EMAS

2020 ◽  
Vol 13 (1) ◽  
pp. 71-78
Author(s):  
Darsono Nababan ◽  
Eric Alexander
Keyword(s):  
Time Series ◽  
Interest Rates ◽  
Gold Price ◽  
Fuzzy Time Series ◽  
Actual Data ◽  
Series Method ◽  
Market Uncertainty ◽  
Low Interest Rates ◽  
Calculation Results ◽  
Time Series Method

Gold is one of the people's preferred forms of investment and is considered the safest (save -heaven). Gold risk which is considered small is the main attraction because in general Indonesian people are not yet familiar with capital market investments such as stocks and mutual funds. But the price of gold is very volatile as for the factors that affect the fluctuations of gold are consumption demand, volatility and market uncertainty, protection of low-interest rates, and the US dollar. Predicting the movement of the gold price and knowing where the direction of the exchange rate moves and determining the price of gold up or down cannot be done accurately and consistently. For this reason, in reducing the risk of loss, an application is needed to predict gold prices using the Fuzzy Time Series Chen algorithm using MATLAB software. In this study to obtain prediction results and comparison charts using actual data and prediction data for the 2015-2017 gold price. From the calculation results obtained by the prediction results with the Fuzzy Time Series method with the Chen algorithm where the average difference between the actual data and prediction data is not more than Rp. 2,850, - where predictions using the Fuzzy Time Series method Chen's algorithm is sufficient to use 1 data to predict the second data which makes this method accurate in predicting the price of gold.

Marx after Minsky: Capital Surplus and the Current Crisis

2016 ◽  
Vol 24 (3) ◽  
pp. 105-146 ◽  
Author(s):  
Jim Kincaid
Keyword(s):  
Interest Rates ◽  
Tax Evasion ◽  
Marxist Theory ◽  
Asset Markets ◽  
Current Crisis ◽  
Corporate Strategies ◽  
Large Current ◽  
Advanced Economies ◽  
Low Interest Rates ◽  
Boom And Bust

Minsky’s theory of financial instability helps clarify how Marxist theory can explain the highly financialised capitalism of today, and the crisis which started in 2008. The advanced economies currently have high realised profits in the productive sector and lagging rates of investment. Shareholder pressures encourage corporate strategies which focus on stock-market ratings and M&A operations, less on productive investment. Tax evasion and the build-up of reserve cash piles by corporations have contributed to a global surplus of what Marx calledloanable capital. This surplus has been augmented by the increasing inequality of personal wealth ownership and, in the international economy by, large current-account surpluses. The results include: huge profits for the financial system; low interest rates; recurrent boom and bust in asset markets; the fuelling of huge increases in household and government debt; and the combination of instability and stagnation which results from an excess supply of loanable capital.

STATIONARY PROCESSES THAT LOOK LIKE RANDOM WALKS— THE BOUNDED RANDOM WALK PROCESS IN DISCRETE AND CONTINUOUS TIME

2002 ◽  
Vol 18 (1) ◽  
pp. 99-118 ◽  
Author(s):  
João Nicolau
Keyword(s):  
Time Series ◽  
Random Walk ◽  
Diffusion Process ◽  
Random Walks ◽  
Interest Rates ◽  
Continuous Time ◽  
Financial Time Series ◽  
Finite Limit ◽  
Closed Expression ◽  
Continuous Time Process

Several economic and financial time series are bounded by an upper and lower finite limit (e.g., interest rates). It is not possible to say that these time series are random walks because random walks are limitless with probability one (as time goes to infinity). Yet, some of these time series behave just like random walks. In this paper we propose a new approach that takes into account these ideas. We propose a discrete-time and a continuous-time process (diffusion process) that generate bounded random walks. These paths are almost indistinguishable from random walks, although they are stochastically bounded by an upper and lower finite limit. We derive for both cases the ergodic conditions, and for the diffusion process we present a closed expression for the stationary distribution. This approach suggests that many time series with random walk behavior can in fact be stationarity processes.

scholarly journals Enhanced Oil Recovery Practices: Global Trend, Nigeria’s Present Status, Prospects and Challenges

2021 ◽  
pp. 79-92
Author(s):  
Adeolu J. Alawode ◽  
Olugbenga A. Falode
Keyword(s):  
Interest Rates ◽  
Enhanced Oil Recovery ◽  
Oil Recovery ◽  
Heavy Oil ◽  
Present Status ◽  
Oil Reserves ◽  
Global Trend ◽  
Low Interest Rates ◽  
Favorable Tax Policy ◽  
Carbon Dioxide Co2

Enhanced oil recovery (EOR) techniques are considered due to unimpressive oil recovery, limited oil reserves, and non-applicability of primary recovery methods in some (heavy oil) fields. In Nigeria, preparation is in gear towards implementing EOR projects. This paper therefore reviews the global trend of EOR practices and discusses Nigeria’s present status, prospects, and challenges. Most EOR projects are employed in sandstone (high permeability) reservoirs; hence based on lithological considerations, all EOR methods are feasible in Nigeria. However, miscible hydrocarbon gas injection is found to be a very good EOR choice because it would drastically reduce the uneconomical practice of gas flaring; besides, transportation of carbon dioxide (CO2) and flue gas is virtually non-existent in Nigeria. Chemical (especially surfactant) flooding is costly; hence it would be feasible in Nigeria if oil price is high. At present, cost implications of heat treatment facilities may be an impedance to implementing thermal EOR for heavy oil in Nigeria. Though microbial EOR is the cheapest, it is not favorable in high temperature (above 85 oC), high salinity (above 100,000 ppm) and deeper (beyond 3,500m) reservoirs. For EOR practices to thrive in Nigeria, there should be an extensive economic evaluation and forecasting, effective research and development, effective training of technical staff for proper operation, surveillance and maintenance of EOR projects, implementation of health, safety and environmental (HSE) guidelines, low inflation rates, low interest rates on loans, general price stability, favorable tax policy, low import duties on machineries and equipment used for EOR, modified private market decisions and encouraging legal and regulatory framework.

scholarly journals The Impact of the Japanese Purchases of U.S. Treasuries on the Dollar/Yen Exchange Rate

2008 ◽  
Vol 8 (1) ◽  
pp. 1850127 ◽  
Author(s):  
Andre Varella Mollick ◽  
Gokce Soydemir
Keyword(s):  
Exchange Rate ◽  
Interest Rates ◽  
Time Increase ◽  
Bond Yields ◽  
Treasury Securities ◽  
Low Interest Rates ◽  
Treasury Bond ◽  
Negative Effect ◽  
The Impact ◽  
The U.S

This article connects net Japanese purchases of U.S. Treasury securities and the U.S. 10-year Treasury bond yields to the yen/dollar exchange rate. VAR estimations suggest that a one-time increase in net Japanese purchases has an immediate negative effect on U.S. long bond yields but a short-lived delayed yen depreciation. Further, a one-time increase in the U.S. long yield leads to an immediate yen depreciation. Our results support the hypothesis that Japanese investors, who are major holders of U.S. debt and face extremely low interest rates domestically, influence the dollar/yen rate in a financially integrated world.

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