Asymmetric Effects of Prices and Storage on Rig Counts: Evidence from the US Natural Gas and Crude Oil Markets
This study empirically investigates the asymmetric effects of spot (future) prices and storage on rig counts in the US natural gas and crude oil markets from January 1986 to May 2020. It adopts the Nonlinear Autoregressive Distributed Lag (NARDL) model and establishes a flexible and efficient framew...
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| Format: | Article |
| Language: | English |
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MDPI AG
2023-08-01
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| Series: | Energies |
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| Online Access: | https://www.mdpi.com/1996-1073/16/15/5752 |
| _version_ | 1797586846049370112 |
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| author | Song-Zan Chiou-Wei Sheng-Hung Chen Wei-Hung Chen |
| author_facet | Song-Zan Chiou-Wei Sheng-Hung Chen Wei-Hung Chen |
| author_sort | Song-Zan Chiou-Wei |
| collection | DOAJ |
| description | This study empirically investigates the asymmetric effects of spot (future) prices and storage on rig counts in the US natural gas and crude oil markets from January 1986 to May 2020. It adopts the Nonlinear Autoregressive Distributed Lag (NARDL) model and establishes a flexible and efficient framework that measures the effects of positive and negative shocks in each of these variables on rig counts while modeling possible asymmetries in both the short and long term. For the natural gas market, the results reveal significant long-term asymmetric effects of spot (future) gas prices and storage on gas rigs. The positive and statistically significant cumulative effect of changes in natural gas storage suggests that larger natural gas storage has caused changes in the use of natural gas drilling rigs. For the crude oil market, we find significant short-term asymmetric effects of spot (future) gas prices and oil stocks on oil rigs. Furthermore, in addition to the optimal price and level of storage, the cost, as proxied by the interest rate, is a crucial determinant in rig drilling decision-making in the energy sector. |
| first_indexed | 2024-03-11T00:28:56Z |
| format | Article |
| id | doaj.art-f53a7e5010d6481388a2b117c390d787 |
| institution | Directory Open Access Journal |
| issn | 1996-1073 |
| language | English |
| last_indexed | 2024-03-11T00:28:56Z |
| publishDate | 2023-08-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Energies |
| spelling | doaj.art-f53a7e5010d6481388a2b117c390d7872023-11-18T22:52:23ZengMDPI AGEnergies1996-10732023-08-011615575210.3390/en16155752Asymmetric Effects of Prices and Storage on Rig Counts: Evidence from the US Natural Gas and Crude Oil MarketsSong-Zan Chiou-Wei0Sheng-Hung Chen1Wei-Hung Chen2Department of International Business, National Kaohsiung University of Science and Technology, Kaohsiung 824004, TaiwanDepartment of International Business, National Kaohsiung University of Science and Technology, Kaohsiung 824004, TaiwanDepartment of International Business, National Kaohsiung University of Science and Technology, Kaohsiung 824004, TaiwanThis study empirically investigates the asymmetric effects of spot (future) prices and storage on rig counts in the US natural gas and crude oil markets from January 1986 to May 2020. It adopts the Nonlinear Autoregressive Distributed Lag (NARDL) model and establishes a flexible and efficient framework that measures the effects of positive and negative shocks in each of these variables on rig counts while modeling possible asymmetries in both the short and long term. For the natural gas market, the results reveal significant long-term asymmetric effects of spot (future) gas prices and storage on gas rigs. The positive and statistically significant cumulative effect of changes in natural gas storage suggests that larger natural gas storage has caused changes in the use of natural gas drilling rigs. For the crude oil market, we find significant short-term asymmetric effects of spot (future) gas prices and oil stocks on oil rigs. Furthermore, in addition to the optimal price and level of storage, the cost, as proxied by the interest rate, is a crucial determinant in rig drilling decision-making in the energy sector.https://www.mdpi.com/1996-1073/16/15/5752rig countsnatural gas marketcrude oil marketstoragestocksNonlinear Autoregressive Distributed Lag (NARDL) model |
| spellingShingle | Song-Zan Chiou-Wei Sheng-Hung Chen Wei-Hung Chen Asymmetric Effects of Prices and Storage on Rig Counts: Evidence from the US Natural Gas and Crude Oil Markets Energies rig counts natural gas market crude oil market storage stocks Nonlinear Autoregressive Distributed Lag (NARDL) model |
| title | Asymmetric Effects of Prices and Storage on Rig Counts: Evidence from the US Natural Gas and Crude Oil Markets |
| title_full | Asymmetric Effects of Prices and Storage on Rig Counts: Evidence from the US Natural Gas and Crude Oil Markets |
| title_fullStr | Asymmetric Effects of Prices and Storage on Rig Counts: Evidence from the US Natural Gas and Crude Oil Markets |
| title_full_unstemmed | Asymmetric Effects of Prices and Storage on Rig Counts: Evidence from the US Natural Gas and Crude Oil Markets |
| title_short | Asymmetric Effects of Prices and Storage on Rig Counts: Evidence from the US Natural Gas and Crude Oil Markets |
| title_sort | asymmetric effects of prices and storage on rig counts evidence from the us natural gas and crude oil markets |
| topic | rig counts natural gas market crude oil market storage stocks Nonlinear Autoregressive Distributed Lag (NARDL) model |
| url | https://www.mdpi.com/1996-1073/16/15/5752 |
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