Complex Sciences. Second International Conference, COMPLEX 2012, Santa Fe, NM, USA, December 5-7, 2012, Revised Selected Papers

Research Article

A Policy of Strategic Petroleum Market Reserves

Download
341 downloads
  • @INPROCEEDINGS{10.1007/978-3-319-03473-7_21,
        author={Michael Mitchell and Walter Beyeler and Matthew Antognoli and Marshall Kuypers and Robert Glass},
        title={A Policy of Strategic Petroleum Market Reserves},
        proceedings={Complex Sciences. Second International Conference, COMPLEX 2012, Santa Fe, NM, USA, December 5-7, 2012, Revised Selected Papers},
        proceedings_a={COMPLEX},
        year={2013},
        month={11},
        keywords={Complex Adaptive Systems Multi-Agent-Based Modeling Buffer Stocks Price Stabilization Strategic Resource Reserves Resource Scarcity},
        doi={10.1007/978-3-319-03473-7_21}
    }
    
  • Michael Mitchell
    Walter Beyeler
    Matthew Antognoli
    Marshall Kuypers
    Robert Glass
    Year: 2013
    A Policy of Strategic Petroleum Market Reserves
    COMPLEX
    Springer
    DOI: 10.1007/978-3-319-03473-7_21
Michael Mitchell1,*, Walter Beyeler1,*, Matthew Antognoli1,*, Marshall Kuypers1,*, Robert Glass1,*
  • 1: Sandia National Laboratories
*Contact email: micmitc@sandia.gov, webeyel@sandia.gov, mantogn@sandia.gov, mkuyper@sandia.gov, rjglass@sandia.gov

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.