Abstract
Unexpected price spikes in petroleum can lead to instability in markets and have a negative economic effect on sectors which rely on petroleum consumption. Sudden rises in the price of petroleum do not have to be long-term to cause negative, cascading impacts across the economy. Firms which make futures purchases or hedge against a higher price during a price spike can become insolvent when the price spike deflates. A policy is needed to buffer short-term perturbations in the petroleum market to avoid short-term price spikes. This study looks at the effects of implementing a Strategic Petroleum Market Reserve within a multi-agent Nation-State model which would utilize trading bands to determine when to buy and sell petroleum reserves. Our analysis indicates that the result of implementing this policy is a more stable petroleum market during conditions of resource scarcity.
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© 2013 ICST Institute for Computer Science, Social Informatics and Telecommunications Engineering
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Mitchell, M.D., Beyeler, W.E., Antognoli, M., Kuypers, M.A., Glass, R.J. (2013). A Policy of Strategic Petroleum Market Reserves. In: Glass, K., Colbaugh, R., Ormerod, P., Tsao, J. (eds) Complex Sciences. Complex 2012. Lecture Notes of the Institute for Computer Sciences, Social Informatics and Telecommunications Engineering, vol 126. Springer, Cham. https://doi.org/10.1007/978-3-319-03473-7_21
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DOI: https://doi.org/10.1007/978-3-319-03473-7_21
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-03472-0
Online ISBN: 978-3-319-03473-7
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