Jim Hamilton has a a great post on the fundamentals underlying his correct prediction of falling gasoline prices. Lots of great information about the connection between spot and forward prices, and what you can infer from forward prices about expectations. He also discusses the reasons for this relatively precipitous decline in retail gasoline prices. So …
Michael Giberson Consumer Reports magazine put a 2007 Chevrolet Tahoe flexible-fuel vehicle running on E85 (an 85 percent ethanol/15 percent gasoline mix) through a battery of tests, and concludes it will cost consumers more than a gasoline burner. A chief limitation comes from ethanol’s lower energy content, which means that vehicles running on ethanol will …
Lynne Kiesling I was just saying to a couple of colleagues yesterday that one of the things we take almost as axiomatic in economics-that prices are a function of expectations of future supply and demand-is little understood by laypeople. Oil markets recently have provided a good example of that interaction. Take, for example, this Bloomberg …
Lynne Kiesling I’ve been so busy that I’ve even missed the opportunity for some shameless self-promotion. Mary Wisniewski wrote an article in Thursday’s Sun-Times about recently-passed legislation that will require Illinois utilities to offer a real-time pricing contract to their residential customers. The legislation requires the Illinois Commerce Commission to make a determination of whether …
Michael Giberson A year hence and clean up continues in New Orleans. Dave Tufte at voluntaryXchange notes a New York Times story reporting on entertainer/club owner Harry Anderson’s decision to leave town. (Try this link to the NYT article.) The energy news element to the story: This spring, the local power company, Entergy, which is …
Lynne Kiesling High prices and profits in the oil industry are inducing further exploration. This exploration is paying off in the Gulf of Mexico (WSJ, subscription required), where the largest new discoveries since the north slope of Alaska are likely. At a time when energy companies are struggling to replace reserves, the Gulf’s deep-water lower-tertiary …
Shifting the Oil Supply Curve to the Right in the Gulf of Mexico Read More »
Lynne Kiesling I haven’t had time to read and think systematically about California’s proposed carbon policy, but I encourage you to read this post and this post at Environmental Economics, as well as the comments on them. I’ll probabably have something to say later, and it will likely riff off of John’s two posts.
Lynne Kiesling Usually in the week before Labor Day we see gas prices rise relative to their mid-summer levels. Not this year: gas prices are declining, to the lowest nominal levels since November 2005 (WaPo, registration required). Unlike normal summers when the seasonal change in demand elasticity provides the dominant effect on prices, this year …
Lynne Kiesling There’s been a lot of interesting wind power news items in the past week or so: 1. An Oregonian article on community wind power investments in smaller-scale projects in rural Oregon: “Although community wind is characterized by its contained scope and local tie-in, it is by no means quaint. The projects use the …
Lynne Kiesling Hal Varian makes a persuasive argument and does us all a great service with his Economic Scene column in today’s New York Times (registration required). He focuses on two specific aspects of the workings of oil and gasoline markets: storage arbitrage and the role of speculators. Storage arbitrage explains why, even if you …
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