Publications: Notes at the Margin

Supporting Prices by Tweaking the Market: Is Shell Optimizing? (May 30, 2016)


Platts reported Wednesday that Shell plans to send more than twelve million barrels of crude to Asia in May and June. From a distance it appeared that Shell was sacrificing revenue by diverting shipments from the Atlantic to the Pacific. However, by sacrificing some revenue on individual shipments, Shell may actually boost the firm’s total revenue and profit. This report discusses this issue, along with a drop in hedging with crude oil futures and the feasability of Donald Trump's proposed energy policy. Regarding the latter, we note that his Trump's ideas for achieving US energy independence may be bad but that doesn't make them unworkable.


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