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Building on recent work on the role of speculation and inventories in oil markets, we embed a competitive oil storage model within a DSGE model of the U.S. economy. This enables us to formally analyze the impact of a (speculative) storage demand shock and to assess how the effects of various demand and supply shocks change in the presence of oil storage facility. We find that business-cycle driven oil demand shocks are the most important drivers of U.S. oil price fluctuations during 1982-2007. Disregarding the storage facility in the model causes a considerable upward bias in the estimated role of oil supply shocks in driving oil price fluctuations. Our results also confirm that a change in the composition of shocks helps explain the resilience of the macroeconomic environment to the oil price surge after 2003. Finally, speculative storage is shown to have a mitigating or amplifying role depending on the nature of the shock.

Business & Economics --- Industries --- Petroleum products --- Prices --- Econometric models. --- Storage. --- Mazut --- Petroleum --- Hydraulic fluids --- Refining --- Prices&delete& --- Econometric models --- Storage --- E-books --- Investments: Energy --- Inflation --- Macroeconomics --- Economic Theory --- General Aggregative Models: Keynes --- Keynesian --- Post-Keynesian --- Energy and the Macroeconomy --- Energy: Demand and Supply --- Energy: General --- Commodity Markets --- Price Level --- Deflation --- Agriculture: Aggregate Supply and Demand Analysis --- Investment & securities --- Economic theory & philosophy --- Oil prices --- Oil --- Commodity price fluctuations --- Supply shocks --- Commodities --- Economic theory --- Petroleum industry and trade --- Supply and demand --- United States

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We study the effects of oil-price shocks on the U.S. economy combining narrative and quantitative approaches. After examining daily oil-related events since 1984, we classify them into various event types. We then develop measures of exogenous shocks that avoid endogeneity and predictability concerns. Estimation results indicate that oil-price shocks have had substantial and statistically significant effects during the last 25 years. In contrast, traditional VAR approaches imply much weaker and insignificant effects for the same period. This discrepancy stems from the inability of VARs to separate exogenous oil-supply shocks from endogenous oil-price fluctuations driven by changes in oil demand.

Petroleum products --- Petroleum industry and trade --- Energy industries --- Oil industries --- Mazut --- Petroleum --- Hydraulic fluids --- Prices --- Econometric models. --- Economic aspects --- Refining --- Investments: Energy --- Inflation --- Macroeconomics --- Industries: Energy --- Time-Series Models --- Dynamic Quantile Regressions --- Dynamic Treatment Effect Models --- Diffusion Processes --- State Space Models --- Methodology for Collecting, Estimating, and Organizing Macroeconomic Data --- Data Access --- Price Level --- Deflation --- Business Fluctuations --- Cycles --- Energy and the Macroeconomy --- Energy: Demand and Supply --- Energy: General --- Macroeconomics: Production --- Investment & securities --- Petroleum, oil & gas industries --- Oil prices --- Oil --- Oil production --- Consumer price indexes --- Commodities --- Production --- Price indexes --- United States

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This Selected Issues Paper focuses on the Heritage and Stabilization Fund (HSF) and development in the energy sector in Trinidad and Tobago. The HSF, established in 2007, is an important national asset, which has broad-based political and social support. The HSF has developed a strong record since its creation. It has performed well as measured by the accumulation of savings, the portfolio return, and adherence to the Santiago Principles for transparency and governance. This is particularly commendable given global and domestic financial crises.

Investment of public funds --- Energy industries --- Finance, Public --- Cameralistics --- Public finance --- Public finances --- Currency question --- Industries --- Power resources --- Public funds, Investment of --- Investments --- Legal investments --- Public investments --- Budgeting --- Investments: Energy --- Exports and Imports --- Macroeconomics --- Industries: Energy --- Public Finance --- Energy: Demand and Supply --- Prices --- Hydrocarbon Resources --- Energy: General --- Energy and the Macroeconomy --- Macroeconomics: Production --- Petroleum, oil & gas industries --- Investment & securities --- Budgeting & financial management --- International economics --- Energy industries & utilities --- Economic & financial crises & disasters --- Energy prices --- Natural gas sector --- Oil --- Oil prices --- Energy sector --- Energy pricing --- Expenditure --- Economic sectors --- Commodities --- Oil production --- Production --- Gas industry --- Petroleum industry and trade --- Budget --- Expenditures, Public --- Trinidad and Tobago