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Journal Article
Costs of Oil Price Exchange-Traded Funds Diminish Usefulness
Crude oil exchange-traded funds (ETFs) are investments designed to track oil price changes. They bear unique costs of which many investors are unaware. Since the first crude oil ETF went to market in April 2006, these costs have been sizable, reducing ETF returns by 1.33 percent per month on top of the average monthly loss of 0.23 percent attributable to weak oil prices.
Discussion Paper
The Pandemic's Impact on Credit Risk: Averted or Delayed?
The COVID-19 recession resulted in historic unemployment and a significant shock to much of the service sector. Despite these macroeconomic challenges, banks' risk-based capital buffers remain high and the number of bank failures remains low. Government relief programs, including the Coronavirus Aid, Relief, and Economic Security (CARES) Act, both directly and indirectly helped stabilize bank balance sheets during the crisis.
Discussion Paper
Speculation in Commodity Futures Markets, Inventories and the Price of Crude Oil
This paper examines the role of inventories in re ners' gasoline production and develops a structural model of the relationship between crude oil prices and inventories. Using data on inventories and prices of oil futures, I show that convenience yields decrease at a diminishing rate as inventories increase, consistent with the theory of storage. In addition to exhibiting seasonal and procyclical behaviors, I show that the historical convenience yield averages about 18 percent of the oil price from March 1989 to November 2014. Although some have argued that a breakdown of the relationship ...
Energy Financing Trends Consistent with Renewables’ Growth
Equity markets appear to favor renewable-energy producers relative to their hydrocarbon counterparts. However, the relatively smaller size of many renewables projects complicates direct comparisons of bank lending to hydrocarbon and renewable entities.
Oil and gas and renewable energy projects demand tailored risk management approaches
The oil and gas sector faces transition pressures and the potential for stranded assets. On the other hand, the renewable energy sector is very sensitive to legislative changes affecting tax incentives and subsidies.
Shift from utility to corporate financing for renewables presents risk
The increase in corporate power purchase agreements relative to utility PPAs means more opportunities for renewable energy developers, but it also presents higher counterparty and merchant tail risks for lenders involved in renewable energy project financing.
Oil and gas industry shows discipline on capex, but risks remain
Oil and gas companies will likely maintain a conservative stance toward production growth, with continued focus on capital discipline and maintenance capex.
Residential solar power shines on, backed by securitized lending
Residential solar is a small and rapidly expanding sector, and the securitization market—the packaging of loans to investors—has been one of the most popular sources of funding for new solar installations.
Low oil prices, local impact: Do depressed energy markets affect banks?
Oil prices have swung dramatically in recent years, shaped by geopolitical conflicts, evolving global demand and shifting energy policies.