A statistics‐based approach for crude oil supply risk assessment. (26th September 2017)

• Record Type: Journal Article
• Authors: Hassani, Hossein; Danesh, Mohammad Ali; Javan, Afshin; Pospiech, Ryszard; Odulaja, Adedapo
• Is Part Of: OPEC energy review. Volume 41:Number 3(2017)
• Page Start: 187
• Page End: 200
• Publication Date: 2017-09-26
• Subjects: Petroleum industry and trade -- Periodicals; Periodicals; 382.422820601
• DOI: 10.1111/opec.12101
• Languages: English
• ISSNs: 1753-0229

Abstract

Abstract: This paper presents two approaches towards quantifying short‐term crude oil supply uncertainty. It provides some background information on the oil market and discusses different methods used in forecasting supply. Both approaches—semiquantitative (SQ) and Monte Carlo (MC)—are based on a risk matrix with likelihood and severity scores assigned. The result of the SQ approach is a risk band presented in percentage terms, whereas the MC method yields a probability distribution. The differences, advantages and disadvantages, as well as the potential expansions of both approaches are discussed. Both methods are applied to a set of major non‐OPEC oil producing countries, and the obtained results are compared.