Oil price shocks and policy implications the emergence of U.S. tight oil production: a case study

How have shocks to supply and demand affected global oil prices; and what are key policy implications following the resurgence of oil production in the United States? Highlights: − The recent collapse in global oil prices was dominated by oversupply. − The future of tight oil in the United States is vulnerable to obstacles beyond oil prices. − Opinions on tight oil from the Top 25 think tank organizations are considered. Global oil prices have fallen more than fifty percent since mid-2014. While price corrections in the global oil markets resulted from multiple factors over the past twelve months, surging tight oil production from the United States was a key driver. Tight oil is considered an unconventional or transitional oil source due to its location in oil-bearing shale instead of conventional oil reservoirs. These qualities make tight oil production fundamentally different from regular crude, posing unique challenges. This case study examines these challenges and explores how shocks to supply and demand affect global oil prices while identifying important policy considerations. Analysis of existing evidence is supported by expert opinions from more than one hundred scholars from top-tier think tank organizations. Finally, implications for United States tight oil production as well as global ramifications of a new low price environment are explored.

Influência das principais commodities agropecuárias e de variáveis macroeconômicas sobre os preços da terra agrícola no Brasil

Este trabalho tem como proposta investigar como o preço de terras de uso rural no Brasil é afetado pelos preços e exportações das principais commodities agropecuárias, bem como por variáveis macroeconômicas, como taxa básica de juros, taxa de câmbio, taxa de inflação e disponibilidade de crédito agrícola. Para tal foram consideradas as produções agrícola de algodão, café, cana-de-açúcar (e seus principais produtos açúcar e etanol), milho e soja, a produção pecuária de carne bovina e a produção industrial de celulose de fibra curta com foco em sua principal matéria prima, os plantios reflorestados de eucalipto. Em linha com estudos anteriores, foi encontrada evidência empírica de que o preço da terra possui cointegração com algumas das variáveis agrícolas, pecuárias e florestais citadas, em especial em estados com maior vocação agropecuária e/ou para silvicultura. Quanto às variáveis macroeconômicas, apenas a taxa básica de juros apresentou cointegração com o preço de terras para todos os estados avaliados, taxa de câmbio e disponibilidade de crédito rural não aparecem como variáveis estatisticamente significantes. Conclui-se que, para estados com notável participação na balança comercial brasileira de produtos agrossilvipastoris, é possível obter um modelo de equilibro de longo prazo entre o preço da terra de uso rural e as variáveis destacadas acima, de modo que investidores do setor possam utilizá-lo como ferramenta de projeção no auxílio da tomada de decisão além de avaliar potenciais impactos no valor de seus ativos A inovação do presente estudo está em testar as hipóteses de cointegração para cada um dos estados da federação.

Impactos econômicos da nova realidade da exploração do pré-sal. Existe uma ameaça ao etanol?

A partir de meados dos anos 2000, a produção brasileira de etanol voltou a prosperar. Enquanto isso, em 2007 foi anunciada a descoberta de grandes reservas de petróleo na camada pré-sal no litoral brasileiro. Com isso, a perspectiva promissora para a indústria brasileira de etanol começou a dar lugar ao desenvolvimento de petróleo do pré-sal com um ambicioso programa de investimentos. Além disso, entre 2011 e 2014 o Governo adotou uma nova política de preços domésticos da gasolina e diesel, com o objetivo de reduzir as pressões inflacionárias, mas reduzindo gradualmente a competitividade do etanol, além de comprometer a situação financeira da Petrobras, dificultando investimentos no pré-sal. Considerando tais desafios e a importância dos setores de petróleo e etanol para a economia brasileira, este estudo tem como objetivo avaliar os impactos econômicos de longo prazo da exploração do pré-sal, com especial atenção para as consequências sobre o setor de etanol. É realizada uma avaliação dos impactos da política de controle do preço da gasolina do período 2011-2014 sobre o setor de etanol. Um modelo adaptado de equilíbrio geral dinâmico recursivo é empregado no qual o setor do petróleo do pré-sal é adicionado como uma tecnologia backstop. Os resultados sugerem que o estímulo precoce da produção do pré-sal para alcançar a produção de petróleo esperada pelo Governo traz mais custos do que benefícios para a economia brasileira. Constatou-se que sem interferência do governo, a produção de petróleo do pré-sal torna-se competitiva somente após 2025-2035. Com relação ao impacto sobre a indústria do etanol, verificou-se que o desenvolvimento do pré-sal não enfraquece a produção brasileira de etanol. No entanto, a política de controle de preço da gasolina teve um impacto negativo sobre o setor de etanol.

Business process in supply chain integration in sugar and ethanol industry

This article presents the application of a diagnosis method in a Brazilian company from the sugar and ethanol industry to identify the level of supply chain integration. The diagnosis method is based on Cooper, Lambert and Pagh reference model for SCM. The method involves nine referential axes established from the eighth key business processes of the reference model.

Asymetric price adjustment and loss aversion

Ajuste assimétrico de preço é observado em diversos mercados, notavelmente varejo de gasolina: um aumento de custo é passado para os consumidores mais rápido do que uma redução. Eu desenvolvo um modelo de busca dos consumidores que gera essa predição sob aversão à perda. Uma fração dos consumidores ignora os preços no mercado e pode adquirir informação a um custo, o que permite que as firmas tenham lucro com dispersão de preços. Ajuste assimétrico de preço emerge se os consumidores são aversos a perdas em relação a um preço de referência. Custos mais altos tornam os consumidores mais dispostos a procurar, mas também diminui as chances de encontrar preços baixos, gerando uma relação custo-preço convexa.

The price of threat: the role of identity-safe marketplaces in predicting intergroup price sensitivity

In field experiments with subjects living either inside or outside Brazilian slums (n=955), we show that consumers living in slums are less price sensitive, in opposition with recent price sensitivity research. Comparing slum and non-slum dwellers, we found that negatively stereotyped consumers (e.g. slum dwellers) were more likely to pay higher amounts for friendlier customer service when facing social identity threats (SITs) in marketplaces such as banks. The mechanism which makes them less price sensitive is related to the perception of how other people evaluate their social groups, and we argue that they pay more because they are seeking identity-safe commercial relationships. This work, besides extending the literature in SITs, presents a perspective for the exchange between economics and psychology on price sensitivity, showing that consumers living in slums are willing to pay more to avoid possibly social identity threating experiences.

Effect of price and in-store promotion on sales: a study of distinct regions in an emerging market

Increasing competition caused by globalization, high growth of some emerging markets and stagnation of developed economies motivate Consumer Packaged Goods (CPGs) manufacturers to drive their attention to emerging markets. These companies are expected to adapt their marketing activities to the particularities of these markets in order to succeed. In a country classified as emerging market, regions are not alike and some contrasts can be identified. In addition, divergences of marketing variables effect can also be observed in the different retail formats. The retail formats in emerging markets can be segregated in chain self-service and traditional full-service. Thus, understanding the effectiveness of marketing mix not only in country aggregated level data can be an important contribution. Inasmuch as companies aim to generate profits from emerging markets, price is an important marketing variable in the process of creating competitive advantage. Along with price, promotional variables such as in-store displays and price cut are often viewed as temporary incentives to increase short-term sales. Managers defend the usage of promotions as being the most reliable and fastest manner to increase sales and then short-term profits. However, some authors alert about sales promotions disadvantages; mainly in the long-term. This study investigates the effect of price and in-store promotions on sales volume in different regions within an emerging market. The database used is at SKU level for juice, being segregated in the Brazilian northeast and southeast regions and corresponding to the period from January 2011 to January 2013. The methodological approach is descriptive quantitative involving validation tests, application of multivariate and temporal series analysis method. The Vector-Autoregressive (VAR) model was used to perform the analysis. Results suggest similar price sensitivity in the northeast and southeast region and greater in-store promotion sensitivity in the northeast. Price reductions show negative results in the long-term (persistent sales in six months) and in-store promotion, positive results. In-store promotion shows no significant influence on sales in chain self-service stores while price demonstrates no relevant impact on sales in traditional full-service stores. Hence, this study contributes to the business environment for companies wishing to manage price and sales promotions for consumer brands in regions with different features within an emerging market. As a theoretical contribution, this study fills an academic gap providing a dedicated price and sales promotion study to contrast regions in an emerging market.

Eficiência e razão de hedge: uma análise dos mercados futuro brasileiros de boi, café, etanol, milho e soja

This research aims to investigate the Hedge Efficiency and Optimal Hedge Ratio for the future market of cattle, coffee, ethanol, corn and soybean. This paper uses the Optimal Hedge Ratio and Hedge Effectiveness through multivariate GARCH models with error correction, attempting to the possible phenomenon of Optimal Hedge Ratio differential during the crop and intercrop period. The Optimal Hedge Ratio must be bigger in the intercrop period due to the uncertainty related to a possible supply shock (LAZZARINI, 2010). Among the future contracts studied in this research, the coffee, ethanol and soybean contracts were not object of this phenomenon investigation, yet. Furthermore, the corn and ethanol contracts were not object of researches which deal with Dynamic Hedging Strategy. This paper distinguishes itself for including the GARCH model with error correction, which it was never considered when the possible Optimal Hedge Ratio differential during the crop and intercrop period were investigated. The commodities quotation were used as future price in the market future of BM&FBOVESPA and as spot market, the CEPEA index, in the period from May 2010 to June 2013 to cattle, coffee, ethanol and corn, and to August 2012 to soybean, with daily frequency. Similar results were achieved for all the commodities. There is a long term relationship among the spot market and future market, bicausality and the spot market and future market of cattle, coffee, ethanol and corn, and unicausality of the future price of soybean on spot price. The Optimal Hedge Ratio was estimated from three different strategies: linear regression by MQO, BEKK-GARCH diagonal model, and BEKK-GARCH diagonal with intercrop dummy. The MQO regression model, pointed out the Hedge inefficiency, taking into consideration that the Optimal Hedge presented was too low. The second model represents the strategy of dynamic hedge, which collected time variations in the Optimal Hedge. The last Hedge strategy did not detect Optimal Hedge Ratio differential between the crop and intercrop period, therefore, unlikely what they expected, the investor do not need increase his/her investment in the future market during the intercrop

Activation and early parthenogenesis of bovine oocytes treated with ethanol and strontium

Efficient artificial activation is indispensable for the success of cloning programs. Strontium has been shown to effectively activate mouse oocytes for nuclear transfer procedures, however, there is limited information on its use for bovine oocytes. The present study had as objectives: (1) to assess the ability of strontium to induce activation and parthenogenetic development in bovine oocytes of different maturational ages in comparison with ethanol; and (2) to verify whether the combination of both treatments improves activation and parthenogenetic development rates. Bovine oocytes were in vitro matured for 24, 26, 28, and 30 h, and treated with ethanol (E, 7% for 5 min) or strontium chloride (S, 10 mM SrCl2 for 5 h) alone or in combination: ethanol + strontium (ES) and strontium + ethanol (SE). Activated oocytes were cultured in vitro in synthetic oviductal fluid (SOF) medium and assessed for pronuclear formation (15-16 h), cleavage (46-48 h) and development to the blastocyst stage (M). Treatment with ethanol and strontium promoted similar results regarding pronuclear formation (E, 20-66.7%; S, 26.7-53.3%; P > 0.05) and cleavage (E, 12.8-40.6%; S, 16.1-41.9%; P > 0.05), regardless of oocyte age. The actions of both strontium and ethanol were influenced by oocyte age: ethanol induced greater activation rates after 28 and 30 h of maturation (48.4 and 66.7% versus 20.0 and 23.3% for 24 and 26 It, respectively; P < 0.05) and strontium after 30 It (53.3%) was superior to 24 and 26h (26.7% for both). Blastocyst development rates were minimal in all treatments (0.0-6.3%; P > 0.05), however, when the mean (+/-S.D.) cell number in blastocysts at the same maturational period was compared, strontium treatment was superior to ethanol for activation rates (82 +/- 5.7 and 89.5 +/- 7.8 versus 54 and 61, at 28 and 30 h, respectively). Improved results were obtained by combined treatments. The combination of ethanol and strontium resulted in similar pronuclear formation (ES, 36.7-83.9%; SE, 53.1-90.3%) and cleavage rates (ES, 31.3-81.3%; SE, 65.6-80.7%). Regarding embryo development, there was no difference (P > 0.05) between treatments, and blastocysts were only obtained in treatment SE at 24 and 26 h (6.5% for both). It is concluded that, SrCl2 induces activation and parthenogenetic development in bovine oocytes. (C) 2003 Elsevier B.V. All rights reserved.

Spittlebug impacts on sugarcane quality and ethanol production

Fundação de Amparo à Pesquisa do Estado de São Paulo (FAPESP)

Cheap assays of malate, glycerol and ethanol in fermenting must and food samples

A preparation, enriched with malate dehydrogenase (MDH), alcohol dehydrogenase (ADH), glycerol -3- P dehydrogenase (GPDH) and glycerol kinase (GK), was obtained from dry baker's yeast. This preparation was used to assay glycerol, ethanol and malate measuring the variations in absorbance (NADH formation) at 340 nm. Good degrees of recoveries were obtained when glycerol was added to red wine and fermenting sugar-cane juice and when L-malate was added to commercial apple juice samples. Good results were also obtained when ethanol was assayed in fermented sugar-cane juice and wine samples, using both the partially purified preparation obtained from dry yeast and a purified commercial alcohol dehydrogenase.

Continuous ethanol production in a nonconventional five-stage system operating with yeast cell recycling at elevated temperatures

Three ranges of increasing temperatures (35-43, 37-45, 39-47degreesC) were sequentially applied to a five-stage system continuously operated with cell recycling so that differences of 2degreesC (between one reactor to the next) and 8degreesC (between the first reactor at the highest temperature and the fifth at the lowest temperature) were kept among the reactors for each temperature range. The entire system was fed through the first reactor. The lowest values of biomass and viability were obtained for reactor R-3 located in the middle of the system. The highest yield of biomass was obtained in the effluent when the system was operated at 35-43degreesC. This nonconventional system was set up to simulate the local fluctuations in temperature and nutrient concentrations that occur in different regions of the medium in an industrial bioreactor for fuel ethanol production mainly in tropical climates. Minimized cell death and continuous sugar utilization were observed at temperatures normally considered too high for Saccharomyces cerevisiae fermentations.

Interconverting flavanone glucosides and other phenolic compounds in Lippia salviaefolia Cham. ethanol extracts

Fundação de Amparo à Pesquisa do Estado de São Paulo (FAPESP)

Environmental management in ethanol and sugarcane plants in Brazil

There has been much discussion on the importance of Brazilian ethanol in promoting a more sustainable society. However, there is a lack of analysis of whether sugarcane plants/factories that produce this ethanol are environmentally suitable. Thus, the objective of this study was to analyse stages of environmental management at four Brazilian ethanol-producing plants, examining the management practices adopted and the factors behind this adoption. The results indicate that (1) only one of the four plants is in the environmentally proactive stage; (2) all plants are adopting operational and organisational environmental management practices; (3) all plants have problems in communicating environmental management practices; and (4) the plant with the most advanced environmental management makes intense use of communication practices and is strongly oriented towards a more environmentally aware international market. This paper is an attempt to explain the complex relationship between the evolution of environmental management, environmental practices and motivation using a framework. The implications for society, plant directors and scholars are described, as well as the study's limitations.