MERTON VIEW OF ENERGY COMPANIES DURING THE ENERGY PRICE DOWNTURN: PIPELINE COMPANIES

摘要

Recently oil and natural gas markets have had either a shortage or surplus of supply. Prices have moved from almost $100 per barrel to below $30 per barrel. The price fall dramatically changed the economics of upstream firms and the service companies providing them services. The EI A (2016) charts the rise and subsequent decline in oil and natural gas prices.~1 While recently prices have recovered to about $50 a barrel, there is no guarantee that the OPEC participants will not cheat in the future by producing more than their quota to fund their governments. Russia also may increase production beyond what was initially agreed as the price recovers. Projections of price beyond the near-term future are uncertain and it may not bode well if the price increase does not at least remain.