Is the World Oil Market "One Great Pool"? A Test

Rodriguez, Alejandro; Williams, Mark

doi:10.15173/esr.v5i2.302

Cited by 20 publications

(13 citation statements)

References 15 publications

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“…Adelman observed that the world's oil market was highly globalised and integrated, a claim that Rodriguez and Williams verified [5]. Nevertheless, there is still controversy surrounding the convergence and divergence of the international oil market.…”

Section: Introductionmentioning

confidence: 99%

Dynamic integration of world oil prices: A reinvestigation of globalisation vs. regionalisation

Fan

2015

Applied Energy

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Section: Introductionmentioning

confidence: 99%

Dynamic integration of world oil prices: A reinvestigation of globalisation vs. regionalisation

Fan

2015

Applied Energy

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“…This result is consistent with the previous studies that found the price of ANS was cointegrated with the price of WTI. Gülen (1997) and Rodriguez and Williams (1993). Table 2 presents parameter estimates using IV and OLS estimation.…”

Section: Resultsmentioning

confidence: 99%

“…Formally, two nonstationary stochastic processes various other crude oils traded on the world market. Gülen (1997) and Rodriguez and Williams (1993) both found that ANS is cointegrated with other crude prices.…”

Section: [Figure 4 About Here]mentioning

confidence: 99%

“…Equation (1) Werden and Froeb (1993) review the use of cointegration and other price tests for antitrust market delineation. 20 Rodriguez and Williams (1993) claim to "show that a relevant antitrust product market is no narrower than crude oil and the appropriate geographic market is the world." 21 Equation (1) allows the both the slope and intercept of the ANS demand curve to change as the USWC moves from surplus to deficit, as predicted by theory.…”

Section: [Figure 4 About Here]mentioning

confidence: 99%

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Market Definition in Crude Oil: Estimating the Effects of the BP/ARCO Merger

Hayes¹,

Shapiro²,

Town³

2007

The Antitrust Bulletin

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On March 31, 1999 Atlantic Richfield (ARCO) agreed to be acquired by British Petroleum (BP) for $27 billion. The merger raised a number of antitrust concerns, including whether the merged company would raise the price of crude oil produced on the Alaskan North Slope (ANS). The combined output of the firms exceeded 70% of total production of ANS crude oil, suggesting that if ANS crude oil were a distinct market the merged firm would possess power over price. We estimate a model of demand for ANS crude oil based on a simple theoretic model of pricing arbitrage to identify the relevant market in which ANS crude oil trades. The dramatic decline in production of ANS crude oil during the 1990s, as the North Slope passed its peak production, provides an excellent natural experiment to assess the effects on prices of declining output. We find no evidence that ANS is a distinct market and argue it is highly unlikely the merged company could have raised the price of ANS.* The authors would like to thank Dan McFadden and Miguel Herce for their comments on this paper and Bryan Patten for his research assistance. † The authors were retained by BP and ARCO to provide expert economic advice on the competitive effects of this merger.

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“…As pointed out in my original paper , questions of market definition have received inadequate attention in the energy area, and more contributions are most welcome, as is debate over empirical methodology and interpretation of results. Unfortunately, the paper by Rodriguez and Williams (1993) in the preceding issue of Energt) Studies Re-view contains serious flaws, rendering its conclusions of doubtful use for addressing energy policy questions. This brief reply explains why…”

Section: Introductionmentioning

confidence: 99%