Analysis of Relationship Between the Sensex and Stock Prices Vis-À-Vis Crude Oil and Stock Prices“ANALYSIS of RELATIONSHIP BETWEEN the SENSEX and STOCK PRICES vis-à -vis CRUDE OIL and STOCK PRICES”GROUPJayanta Dutta | 063Karanpal Singh Julka | 085Meenakshi | 090Nikhil Daga | 094Palak Bansal | 097Prapti | 098Rashi Shekhar | 102Nimish Shah | 110ACKNOWLEDGEMENTWe are indeed very thankful to Prof. C. Raju for giving us the opportunity to work on such an enlightening project. If it hadn’t been for him, we would have never explored this particular field in such detail and with such enthusiasm. He has throughout been a supportive and guiding mentor, providing inputs and clearing doubts as and when needed. We would also like to thank our colleagues who helped us through the project, providing motivation and help whenever required. Last but not the least, we are grateful to the institute for providing us the necessary infrastructure, which helped for the completion of the project.
The Nature of the Problem and How to Protect It.
The question on the future of the supply of oil is one arising from the global debate as to the viability of a global energy security. Oil demand in Russia is high and falling. If there is any reason to believe that oil would not continue to be transported on existing pipelines, they have no problem using international organizations who could help expedite this transformation. Moreover, the most successful countries have already been able to establish an oil transport network of 100 kilometers on-par with existing commercial pipelines, such as from China to India and through Turkey. The situation remains grim, but it is possible that a global energy security would be more viable in the short and long term that would be compatible with the energy security of Russia.
This has been the focus of the international community in recent years. In addition to the financial crisis in 2008, an independent report of the Financial Control Board of Iran, which had been in the process of taking over from the US Treasury on September 11, stated: “We are prepared to work with the International Monetary Fund,” referring to the international monetary union. This view has raised serious questions. As the United Nations has established the concept of the International Monetary Fund (IMF), and as one commentator, the New York Times writes “We would consider this as a serious threat to future development.” The IMF’s main priority in promoting and sustaining a global energy security is the export and import of petroleum products from Russia. On March 1st, 2017 the New York Times reported that Russia intends to purchase up to 17 percent of oil exports from OPEC by 2017. Moreover, Russia is the largest producer of petroleum products in the world, with a significant share of this coming from its natural gas reserves and from natural gas deposits. Russian President Vladimir Putin was one of the richest people in the world and has contributed to the country’s natural gas supply since 2007.
The recent OPEC meeting announced a five-year deal and an agreement to limit domestic energy imports of up to 17 percent by 2020, which is equivalent to nearly double the current rate of imports. This price increase is expected to continue even after the proposed increase in the national budget has had no effect on Russian energy demand, as the oil embargo has not led to the current high level of imports. However, there seems to be a serious mismatch between oil production and economic growth. This mismatch could be the main reason why Russian domestic production has fallen almost 14 percent from 2008 to 2016, on average. Therefore, as mentioned earlier, oil prices are falling sharply. At the current rate and while the prices of most of the major gas supplies in both Russia and OPEC are up, the current price of petroleum products will be below the level needed to produce energy, in which case demand for oil supplies will collapse further, with the loss of significant oil production resulting in a shortage in Russia.
This is especially the case in Russia. Oil production and supply share in production and consumption has also been falling across the board for at least three straight years now. While the decline in both oil production and consumption was very mild at the end of November last year, recent historical trends suggest a major increase as recent as December of 2017. As such, even if Russia is not able to export sufficient oil to compete with OPEC, there is a significant possibility of a similar decline in the price of oil as it did in October of 2016 (with OPEC in an agreement with Russia and China to cut the level of price imports to an annual range of between 5 and 25 percent by 2017).
Source: The Energy Policy Institute
Read or Share this story: http://az
The Nature of the Problem and How to Protect It.
The question on the future of the supply of oil is one arising from the global debate as to the viability of a global energy security. Oil demand in Russia is high and falling. If there is any reason to believe that oil would not continue to be transported on existing pipelines, they have no problem using international organizations who could help expedite this transformation. Moreover, the most successful countries have already been able to establish an oil transport network of 100 kilometers on-par with existing commercial pipelines, such as from China to India and through Turkey. The situation remains grim, but it is possible that a global energy security would be more viable in the short and long term that would be compatible with the energy security of Russia.
This has been the focus of the international community in recent years. In addition to the financial crisis in 2008, an independent report of the Financial Control Board of Iran, which had been in the process of taking over from the US Treasury on September 11, stated: “We are prepared to work with the International Monetary Fund,” referring to the international monetary union. This view has raised serious questions. As the United Nations has established the concept of the International Monetary Fund (IMF), and as one commentator, the New York Times writes “We would consider this as a serious threat to future development.” The IMF’s main priority in promoting and sustaining a global energy security is the export and import of petroleum products from Russia. On March 1st, 2017 the New York Times reported that Russia intends to purchase up to 17 percent of oil exports from OPEC by 2017. Moreover, Russia is the largest producer of petroleum products in the world, with a significant share of this coming from its natural gas reserves and from natural gas deposits. Russian President Vladimir Putin was one of the richest people in the world and has contributed to the country’s natural gas supply since 2007.
The recent OPEC meeting announced a five-year deal and an agreement to limit domestic energy imports of up to 17 percent by 2020, which is equivalent to nearly double the current rate of imports. This price increase is expected to continue even after the proposed increase in the national budget has had no effect on Russian energy demand, as the oil embargo has not led to the current high level of imports. However, there seems to be a serious mismatch between oil production and economic growth. This mismatch could be the main reason why Russian domestic production has fallen almost 14 percent from 2008 to 2016, on average. Therefore, as mentioned earlier, oil prices are falling sharply. At the current rate and while the prices of most of the major gas supplies in both Russia and OPEC are up, the current price of petroleum products will be below the level needed to produce energy, in which case demand for oil supplies will collapse further, with the loss of significant oil production resulting in a shortage in Russia.
This is especially the case in Russia. Oil production and supply share in production and consumption has also been falling across the board for at least three straight years now. While the decline in both oil production and consumption was very mild at the end of November last year, recent historical trends suggest a major increase as recent as December of 2017. As such, even if Russia is not able to export sufficient oil to compete with OPEC, there is a significant possibility of a similar decline in the price of oil as it did in October of 2016 (with OPEC in an agreement with Russia and China to cut the level of price imports to an annual range of between 5 and 25 percent by 2017).
Source: The Energy Policy Institute
Read or Share this story: http://az
The basic aim of the analysis is to understand the relation between the Sensex and Stock Prices vis-Ă -vis Crude Oil and Stock Prices, if any, by applying the concepts learnt throughout the Quantitative Methods course. Besides relying on basic formulae, we have also validated our findings.
CONCEPTReliance Industries is