Academic literature on the topic 'Oil output'

Since our last forecast in April 2008 there have been further increases in oil prices, as is illustrated in figure 1, which tracks oil price projections in our forecasts this year, and compares them to the projection we made in January and July 2007. Over the past eighteen months oil prices have risen from around $60 per barrel to a currently projected level of $123 in 2009. Oil prices have recently reached a peak of $145.6 a barrel before falling back to around $134. Our projection for the short term is based on those of the US Energy Information Agency and uses information from forward markets as well as an evaluation of supply conditions. In the longer term we presume that real oil prices will rise in line with the real interest rate, as is discussed on pp. 4–7 of this Review. This note looks at the impacts of recent increases in oil prices on the path for real wages by investigating the share of fossil fuels in costs. It also evaluates the impact of the rise in prices since our last forecast, and investigates the impact on oil prices of the growth in demand outside the OECD.

Sudden changes in oil prices have been a major concern for countries – oil producing and non-oil producing countries alike. Due to this, we assessed the effects of such an uncertainty on the real output of Nigeria, an oil producing country, during the period 1980:1 to 2014:4. We achieved this objective by using a vector autoregressive model that permits us to decompose oil price uncertainty into positive and negative uncertainties. We then quantified the responses of real output to these uncertainties. Using the conditional variance of the returns in the composite refiners’ acquisition cost of crude oil deflated by US GDP deflator as our measure of oil price uncertainty, we found that a positive uncertainty leads to a decline in real output, while a negative uncertainty leads to a rise in real output. The response of real output to these uncertainties is asymmetric.

As the global recovery strengthens, attention has to focus once again on the price of oil. The sharp increase seen in the last quarter of 2010 has raised serious concerns for the economic outlook. Oil prices have risen significantly since the beginning of 2009, and the rate of increase suddenly accelerated in the last months of 2010. Between September and December 2010 alone, oil prices rose by about $20, to reach $95 per barrel. Figure 1 compares the expected path of the oil price used in our forecast in October 2010 to that in January 2011, based on information from forward markets as well as an evaluation of supply conditions.

It is customary to suggest that the asymmetry in the transmission of oil price shocks to real output is well established. Much of the empirical work cited as being in support of asymmetry, however, has not directly tested the hypothesis of an asymmetric transmission of oil price innovations. Moreover, many of the papers quantifying these asymmetric responses are based on censored oil price VAR models that have recently been shown to be invalid. Other studies are based on dynamic correlations in the data and do not distinguish between cause and effect. Recently, several new methods of testing and quantifying asymmetric responses of U.S. real economic activity to positive and negative oil price innovations have been developed. We put this literature into perspective, contrast it with more traditional approaches, highlight directions for further research, and reconcile some seemingly conflicting results reported in the literature.

AbstractOften in oil reservoirs a layer of water lies under the layer of oil. The suction pressure due to a distribution of oil wells will cause the oil-water interface to rise up towards the wells. Given a particular distribution of oil wells, we are interested in finding the flow rates of each well that maximise the total flow rate without the interface breaking through to the wells. A method for finding optimal flow rates is developed using the Muskat model to approximate the interface height, and a version of the Nelder-Mead simplex method for optimisation. A variety of results are presented, including the perhaps nonintuitive result that it is better to turn off some oil wells when they are sufficiently close to one another.

This paper is intended to analyze the effect of oil price changes on potential output and actual output in the state budget cycle and identifies the output gap which is the difference between potential output and actual output. The research methodology uses a quantitative approach to analyze problems that occur related to the impact of oil price changes to the state budget cycle. Data analysis was carried out through the approach cyclically adjusted fiscal balance with a simplified approach. This research identified that the potential output is likely to continue increasing in line with Indonesia's oil price trends which is continue to rise following the world oil price movements. In calculating the output gap using a linear trend and HP filter, the result is fuctuating depend on the percentage changes in both potential output and actual output. This paper concludes that Indonesian oil price (ICP) has a significant impact on changes in the state budget cycle. If oil prices rise, the output gap between potential output and actual output is greater, and vice versa. This will make the budget vulnerable to shock that occurs as an external infuence.

Thesis (S.B.)--Massachusetts Institute of Technology, Dept. of Mechanical Engineering, 2007.
Includes bibliographical references (leaves 32-33).
The manual processing of food products has become a substantial part of the daily routine of a typical household in the developing world. Consumption of oil is an essential part of an individual's diet and thus, the production of oil is an essential activity. In many communities, this oil is obtained by manually pressing it from peanuts. In order to more efficiently and easily express oil from peanuts, a design for a treadle-powered peanut oil press was created. My thesis work will attempt to further increase the amount of oil extracted by optimizing the design of this peanut oil press. The press transfers the motion of the treadle to the horizontal motion of a piston that presses the peanuts via a rotating cam. The focus of this thesis will be optimizing the design of the cam with respect to oil yield. The shape of the cam determines the displacement profile of the piston's compression of the peanuts. I will determine the optimal profile by designing and performing experiments on a variety of different displacement profiles and measuring the amount of oil extracted from the pressed peanuts. The results of these experiments will then determine the optimal cam design.
by Ravi M. Patel.
S.B.

The development of competent technicians for the oil and gas industries is vital for a sustainable economy in Libya. One of the major factors that brought about modernisation in the country is the export of oil and gas. This has allowed Libya to embark on profound growth and expansion in all sectors, including health and education. Technical education is one of the most significant components of Human Resources Development (HRD). Therefore, the government has embarked on establishing the Technical Education and Training (TET) programme for preparing and developing technicians to work in the oil and gas industries. This thesis focuses on an assessment of the TET programme. It is important to note that to the knowledge of the researcher, there has been no research conducted to assess TET programme in Libya. Therefore, this study can be considered as an initial source of information that is aimed to contribute to the knowledge in this field. In order to understand the nature of the TET programme and how it is perceived by the respondents, two research approaches were adopted, namely quantitative and qualitative. The results suggest that the respondents are positive about issues relating to the process of the TET programme and the relationship between the Petroleum Training and Qualifying Institute (PTQI) and the oil and gas industries in conducting this programme. To establish this, 3 questionnaires were used to collect data from the teaching staff, students and technicians who attended the TET programme. Results of the quantitative analysis suggest that respondents mostly agreed on issues related to the quality of the TET programme, the curricula, teaching and learning, educational resources and educational planning and assessment. However, although these results show a positive perception towards the TET programme, up to 38.5% of the respondents were negative on issues related to the quality of the TET programme, curricula, teaching and learning, educational resources and educational planning and assessment. In addition, results indicated that the managers at the PTQI and oil industries were working in partnership to organise and manage the TET programme. These results appear to suggest that although the majority of the respondents were happy with the TET programme further studies may be required to understand the effectiveness of the TET programme

This thesis examines the influence of oil price uncertainty shocks on sector stock return uncertainties and real output and provides new insights on how oil price uncertainty impulses are transmitted to the Nigerian macroeconomy. Five industry sectors namely banking, oil and gas, insurance, food beverages and tobacco, and consumer goods are investigated. The major contributions of this thesis include the decomposition of the effect of oil price change into sector stocks, application of second moment analysis, utilisation of high frequency micro-data and adoption of more than one econometric methodology. This deviates markedly from previous studies and unveils critical decision making information that was hitherto subsumed under the conventional macro-analysis approach. Three themes are examined for Nigeria using the multifactor model and the structural vector autoregressive framework. The first focuses on estimating sector stock returns sensitivity to oil price changes; the second analyses the effect of oil price uncertainty shocks on sector stock returns uncertainty, while the third assesses the effect of oil price uncertainty shocks on output growth. Significant policy issues include the overwhelming consequence of the oil price factor, the industry-wide negative effect of exchange rate and the near neutrality of interest rate effect. Evidence of price and exchange rate puzzles are clearly demonstrated. Though this poses a serious threat to the effective conduct of monetary policy in achieving the price and monetary stability mandate, they however, serve as potent tools for economic agents’ portfolio selection and management of investment risks. Suggested policy direction includes monitoring oil price movements, ensuring a stable foreign exchange market, and the removal of structural rigidities such as infrastructural bottlenecks and fuel subsidy programme. This would eliminate the perceived impediments to the effective conduct and implementation of monetary policy as well as enhance the seamless transmission of policy impulses to the economy.

Thesis (S.B.)--Massachusetts Institute of Technology, Dept. of Mechanical Engineering, 2010.
Cataloged from PDF version of thesis.
Includes bibliographical references (p. 52).
In northern Ghana, part of a belt reaching from Sub-Saharan Africa to northern Uganda, women collect and process Shea nuts for their valuable oil. This oil is then used in various cosmetic, cooking, and medicinal products. However, the traditional process to extract oil from Shea kernels is time and labor intensive, and the quality is inconsistent, preventing it from being a primary source of income. In order to address these problems, a hydraulic jack press for extracting Shea oil was designed for a woman's co-operative in the village of New Longoro during the summer of 2009 as part of the International Development Design Summit. This thesis presents the results of a study of the effect of temperature and roasting on the Shea oil yield of a hydraulic jack press in order to evaluate its practicality. Extraction efficiency was measured for ground Shea kernels, either unroasted or roasted, for pressing temperatures ranging from 50-70*C. It was found that a pressing temperature of 60-62°C produced the highest oil yields for both roasted and unroasted nuts, with unroasted, ground kernels producing slightly more oil than roasted, ground kernels. The highest yield produced was (23 ± 2.8)% for unroasted Shea kernels at 60.7°C. Furthermore, it was observed that the optimal press chamber configuration is one with perforations along the circumference of the cylinder and on the base with slits to allow oil to escape. It was also confirmed that post-press filtering will be necessary to purify the oil for marketability. Finally, although the initial results are promising, more investigation is needed in order to determine the economic viability of using the hydraulic jack press.
by Lisa Cristina Tacoronte.
S.B.

El concepto de Peak-Oil (el cénit del petróleo) es complejo y a menudo malentendido. Después de aclarar que el Peak-Oil es tanto un problema de estocs como de flujos, se ofrecen los conceptos de calidad y cantidad del recurso para facilitar la comprensión de la multitud de temas que influyen en el momento del cénit del petróleo y sus posibles impactos. Una revisión de la literatura y las últimas evidencias sugieren que hay un alto riesgo de que el Peak-Oil ocurra antes de 2020, dejando poco tiempo para la adaptación. La teoría de los sistemas y la termodinámica muestran que esto es un problema grave, dado que no podemos confiar únicamente en otros recursos energéticos como substitutos o en la mejora de la eficiencia. Es por esto que en la literatura sobre resiliencia y vulnerabilidad se recomiendan procesos de adaptación en la gestión de recursos en los casos de dependencias a recursos de riesgo (como es el caso de nuestra economía respecto al petróleo). Sorprende, por tanto, la ausencia de respuestas institucionales adecuadas y la falta de políticas de adaptación y planes de emergencia. Una primera aproximación mediante un análisis institucional de esta situación especula con que esto sea debido al paradigma dominante en la economía neoclásica, de la escasez relativa, a la gestión de los recursos no renovables mediante los mercados y al optimismo tecnológico. Por este motivo, se analiza la filosofía y se realizan encuestas para investigar las diferentes posturas posibles frente a la tecnología; sus orígenes y su importancia entre los diferentes científicos de la sostenibilidad. Una de las contribuciones principales de este texto en relación a la situación actual ante el cénit de petróleo es que realiza una rigorosa exploración y aplicación del análisis input-output para evaluar los efectos potenciales y las vulnerabilidades del sistema económico mundial. Este tipo de análisis son un primer paso hacia una gestión adaptativa de recursos, porque ayudan a entender el sistema energético en el que vivimos. Los casos de estudio presentados demuestran que ciertos grupos de industrias parecen particularmente vulnerables ante el cénit de petróleo (p.ej. transporte, petroquímica, comercio, etc.). Industrias que, por la importancia que tienen en el sistema económico, causan que el sistema entero se vuelva vulnerable. Este tipo de información es enormemente importante para diseñar políticas adaptativas. Finalmente se presenta un modelo radical de políticas para la adaptación a la base de recursos: el decrecimiento económico hacia una economía del estado estacionario. Se aclara, además, un viejo conflicto entre Herman Daly y Nicolas Georgescu-Roegen. La economía del estado estacionario se define como una ‘meta inalcanzable’, a la que nunca se puede llegar pero a la que se puede y deberíamos aproximarnos.
Peak-Oil is a complex, often misunderstood phenomenon. After clarifying that Peak-Oil is both a stock as well as a flow problem, the concepts of resource quality and quantity are offered for getting a grasp of the many below and above ground issues that influence its timing and possible impacts. A review of the latest evidence suggests that there is a significant risk of Peak-Oil occurring before 2020, giving us little time for adaptation. Systems theory and thermodynamics illustrate that this is a serious problem, as we may not solely rely on other energy sources for substitution or efficiency improvements. The resilience literature therefor recommends adaptive resource management processes in cases of dependencies on risky resources, as in our case of oil for the world economy. The lack of appropriate institutional response and development of adaptive policies or contingency plans is therefore rather surprising. A first attempt of an institutional analysis, speculates that this may be due to the dominant paradigm in neoclassical economic theory of relative resource scarcity, governance of non-renewable resources via markets and technological optimism. For this reason, a detour into philosophy and the analysis of surveys is taken in order to investigate the different possible attitudes towards technology, their origins and distribution among sustainability scientists. One main contribution of this text to the present Peak-Oil situation is the in-depth exploration and application of Input-Output analysis for estimating potential impacts and vulnerabilities of world economic systems to Peak-Oil. Such analysis is the first step towards adaptive resource management, it is about starting to get to know the system. The reproduced case studies show how certain clusters of industries seem to be vulnerable to Peak-Oil (e.g. transport, petrochemicals, wholesale and retail trade, etc.) and because of their importance within the structure of the economy render the entire economic system vulnerable to the phenomenon. Such information is of utter importance for designing adaptive policies. Finally the radical resource base adaptive policy option of economic degrowth towards a steady state economy (SSE) is presented and a settlement of an old dispute between Herman Daly and Nicolas Georgescu-Roegen offered. The SSE is defined as an unattainable goal, which can never actually be reached but can and should be approximated.

This diploma thesis is about lowering installation height of turbocharger without significant increase of the oil pressure inside the housing at the piston rings. At the beginning of the thesis is research about supercharging and turbocharging, construction and parts that are placed inside a turbocharger. Next chapter is short brief about CFD. Further chapters are about design and changes at the central housing and about simulations. From simulations were the results obtained.

The thesis studies three distinct issues in monetary economics using a common dynamic general equilibrium approach under the assumptions of rational expectations and nominal price rigidity.
The first chapter deals with the so-called "liquidity trap" - an issue which was raised originally by Keynes in the aftermath of the Great Depression. Since the nominal interest rate cannot fall below zero, this limits the scope for expansionary monetary policy when the interest rate is near its lower bound. The chapter studies the conduct of monetary policy in such an environment in isolation from other possible stabilization tools (such as fiscal or exchange rate policy). In particular, a standard New Keynesian model economy with Calvo staggered price setting is simulated under various alternative monetary policy regimes, including optimal policy. The challenge lies in solving the (otherwise linear) stochastic sticky price model with an explicit occasionally binding non-negativity constraint on the nominal interest rate. This is achieved by parametrizing expectations and applying a global solution method known as "collocation". The results indicate that the dynamics and sometimes the unconditional means of the nominal rate, inflation and the output gap are strongly affected by uncertainty in the presence of the zero lower bound. Commitment to the optimal rule reduces unconditional welfare losses to around one-tenth of those achievable under discretionary policy, while constant price level targeting delivers losses which are only 60% larger than under the optimal rule. On the other hand, conditional on a strong deflationary shock, simple instrument rules perform substantially worse than the optimal policy even if the unconditional welfare loss from following such rules is not much affected by the zero lower bound per se.
The second thesis chapter (co-authored with Andrea Pescatori) studies the implications of imperfect competition in the oil market, and in particular the existence of a welfare-relevant trade-off between inflation and output gap volatility. In the standard New Keynesian model exogenous oil shocks do not generate any such tradeoff: under a strict inflation targeting policy, the output decline is exactly equal to the efficient output contraction in response to the shock. I propose an extension of the standard model in which the existence of a dominant oil supplier (such as OPEC) leads to inefficient fluctuations in the oil price markup, reflecting a dynamic distortion of the economy's production process. As a result, in the face of oil sector shocks, stabilizing inflation does not automatically stabilize the distance of output from first-best, and monetary policymakers face a tradeoff between the two goals. The model is also a step away from discussing the effects of exogenous oil price changes and towards analyzing the implications of the underlying shocks that cause the oil price to change in the first place. This is an advantage over the existing literature, which treats the macroeconomic effects and policy implications of oil price movements as if they were independent of the underlying source of disturbance. In contrast, the analysis in this chapter shows that conditional on the source of the shock, a central bank confronted with the same oil price change may find it desirable to either raise or lower the interest rate in order to improve welfare.
The third thesis chapter (co-authored with Andrea Pescatori) studies the extent to which the rise in US macroeconomic stability since the mid-1980s can be accounted for by changes in oil shocks and the oil share in GDP. This is done by estimating with Bayesian methods the model developed in the second chapter over two samples - before and after 1984 - and conducting counterfactual simulations. In doing so we nest two other popular explanations for the so-called "Great Moderation": (1) smaller (non-oil) shocks; and (2) better monetary policy. We find that the reduced oil share can account for around one third of the inflation moderation, and about 13% of the GDP growth moderation. At the same time smaller oil shocks can explain approximately 7% of GDP growth moderation and 11% of the inflation moderation. Thus, the oil share and oil shocks have played a non-trivial role in the moderation, especially of inflation, even if the bulk of the volatility reduction of output growth and inflation is attributed to smaller non-oil shocks and better monetary policy, respectively.
La tesis estudia tres problemas distintos de macroeconomía monetaria utilizando como marco común el equilibrio general dinámico bajo expectativas racionales y con rigidez nominal de los precios.
El primer capítulo trata el problema de la "trampa de liquidez" - un tema planteado primero por Keynes después de la Gran Depresión de 1929. El hecho de que el tipo de interés nominal no pueda ser negativo limita la posibilidad de llevar una política monetaria expansiva cuando el tipo de interés se acerca a cero. El capítulo estudia la conducta de la política monetaria en este entorno en aislamiento de otros posibles instrumentos de estabilización (como la política fiscal o la política de tipo de cambio). En concreto, se simula un modelo estándar Neo-Keynesiano con rigidez de precios a la Calvo bajo diferentes regimenes de política monetaria, incluida la política monetaria óptima. El reto consiste en resolver el modelo estocástico bajo la restricción explícita ocasionalmente vinculante de no negatividad de los tipos de interés. La solución supone parametrizar las expectativas y utilizar el método de solución global conocido como "colocación". Los resultados indican que la dinámica y en ocasiones los valores medios del tipo de interés, la inflación y el output gap están muy influidos por la presencia de la restricción de no negatividad. El compromiso con la regla monetaria óptima reduce las pérdidas de bienestar esperadas hasta una décima parte de las pérdidas obtenidas bajo la mejor política discrecional, mientras una política de meta constante del nivel de precios resulta en pérdidas que son sólo 60% mayores de las obtenidas bajo la regla óptima. Por otro lado, condicionado a a un choque fuerte deflacionario, las reglas instrumentarias simples funcionan mucho peor que la política óptima, aun si las pérdidas no condicionales de bienestar asociadas a dichas reglas no están muy afectadas por la presencia de la restricción de no negatividad en si.
El segundo capítulo de la tesis estudia las implicaciones de la competencia imperfecta en el mercado del petróleo, y en concreto la existencia de un conflicto relevante entre la volatilidad de la inflación y la del output gap de un país importador de petróleo. En el modelo estándar Neo Keynesiano, los choques petroleros exógenos no generan ningún conflicto de objetivos: bajo una política de metas de inflación estricta, la caída del output es exactamente igual a la contracción eficiente del output en respuesta al choque. Este capitulo propone una extensión del modelo básico en la cual la presencia de un proveedor de petróleo dominante (OPEP) lleva a fluctuaciones ineficientes en el margen del precio del petróleo que reflejan una distorsión dinámica en el proceso de producción de la economía. Como consecuencia, ante choques provinientes del sector de petróleo, una política de estabilidad de los precios no conlleva automáticamente a una estabilización de la distancia del output de su nivel eficiente y existe un conflicto entre los dos objetivos. El modelo se aleja de la discución los efectos de cambios exógenos en el precio del petróleo y se acerca al análisis de las implicaciones de los factores fundamentales que provocan los cambios en el precio del petróleo en primer lugar. Esto último representa una ventaja clara frente a la literatura existente, la cual trata tanto los efectos macroeconómicos como las implicaciones para la política monetaria de cambios en el precio del petróleo como si éstos fueran independientes de los factores fundamentales provocando dicho cambio. A diferencia de esta literatura, el análisis del capitulo II demuestra cómo frente al mismo cambio en el precio del petróleo, un banco central puede encontrar deseable bien subir o bajar el tipo de interés en función del origen del choque.
El tercer capitulo estudia el grado en que el ascenso de la estabilidad macroeconómica en EE.UU. a partir de mediados de los 80 se puede atribuir a cambios en la naturaleza de los choques petroleros y/o el peso del petróleo en el PIB. Con este propósito se estima el modelo desarrollado en el capitulo II con métodos Bayesianos utilizando datos macroeconómicos de dos periodos - antes y después de 1984 - y se conducen simulaciones contrafactuales. Las simulaciones permiten dos explicaciones alternativas de la "Gran Moderación": (1) menores choques no petroleros; y (2) mejor política monetaria. Los resultados apuntan a que el petróleo ha jugado un papel no-trivial en la moderación. En particular, el menor peso del petroleo en el PIB a partir de 1984 ha contribuido a una tercera parte de la moderación de la inflación y un 13% de la moderación del output. Al mismo tiempo, un 7% de la moderación del PIB y 11% de la moderación de la inflación se pueden atribuir a menores choques petroleros.

This chapter examines the long-run effects of oil revenue and its volatility on economic growth, as well as the role of institutions in this relationship. We collect annual and monthly data on 17 major oil producers between 1961 and 2013, and use the panel autoregressive distributed lag (ARDL) approach as well as its cross-sectionally augmented version (CS-ARDL) for estimation. Therefore, in contrast to earlier literature on the resource curse, we take into account all three key features of the panel: dynamics, heterogeneity, and cross-sectional dependence. The results suggest that: (i) oil revenue volatility has a significant negative effect on output growth; (ii) a higher growth rate of oil revenue significantly raises economic growth; and (iii) better fiscal policy can offset some of the negative effects of oil revenue volatility. We therefore argue that volatility in oil revenues combined with poor governmental responses to this volatility drives the resource curse paradox.

The rapid expansion of whaling in the decade before the First World War occurred because, after a century in which whale oil had been gradually ousted from its traditional uses, modern science gave it a new lease of life. Whale oil creased to be an elementary product, fit only for burning and other lowly uses, and became, under the influence of chemical technology, a multi-purpose raw material for modern industry. As a consequence whaling was faced with quite unprecedented demands for oil (output, for instance, rose from 47,387 tons in 1909/1910 to 134,000 in 1913/1914)...

Forcing energy firms to pay taxes was one of Putin’s greatest successes, but the methods he used exacerbated Russia’s most persistent problem: a corrupt and inefficient energy sector. Khodorkovsky’s Yukos company was handed over to Rosneft, a new state-owned oil champion controlled by Putin’s long-time associate Igor Sechin. At the same time, Putin established control over the natural gas monopoly, Gazprom, without taking serious steps to reform governance. The 2000s did see some positive steps in the energy sector, particularly with regard to a new tax regime that provided strong incentives for firms to increase output—and Russia’s oil and gas output surged forward as a result. Yet a significant portion of Russia’s energy windfall was wasted through corruption and mismanagement.

This chapter examines how the motivation to establish market power in the oil export market influenced Saddam Hussein’s decision to invade Kuwait in 1990. In the wake of the costly Iran-Iraq war, Hussein desperately needed access to new resources. By controlling Kuwait’s oil production, Iraq could both augment its own oil resources and prevent Kuwait from overproducing and putting downward pressure on the price of oil. Relatively unconstrained by low levels of economic dependence and a lack of acceptable institutional solutions, Hussein turned to violence to pursue his market power goals. A subsequent invasion of Saudi Arabia would have given Iraq a sufficient market share to be able to control the global output and price of oil. To prevent such a shift in market power, a coalition of forces led by the United States intervened militarily and drove Iraqi forces out of Kuwait.

This chapter focuses on the selection of optimum parameters for transesterification of linseed oil biodiesel production in the presence of calcium oxide (CaO) obtained from the waste eggshells. The waste chicken eggshells were calcined at 900°C for 4 hours and it was characterized by X-ray diffractometer (XRD). The transesterification process was conducted according to L9 orthogonal array with selected input control parameters such as methanol to oil molar ratio, reaction temperature, and catalyst loading. The output parameters were biodiesel yield and viscosity. The multi-objective, decision-making technique called Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) was used to identify the optimum transesterification process parameters to obtain maximum biodiesel yield with minimal viscosity. The optimized values for transesterification process parameters were depicted as methanol to oil ratio of 6:1, reaction temperature of 65°C, and catalyst loading of 5% w/w.

The last decade has brought a row of substantial changes that have profound implications for the traditional hydrocarbon resource-rich economies. Economic conditions may change radically either throughout a decade or within months. The question is whether there is no other option for a hydrocarbon resource-rich economy than to be held hostage to the fluctuations in global oil prices. The general answer to a changing environment is: Adapt! From the macroeconomic perspective, this means diversifying the economy to broaden the income base and significantly reduce the dependence on oil revenues. The Saudi Vision 2030 represents a complex plan for substantial socioeconomic adjustments that are about to move the economy toward a more diversified and sustainable one. This discussion paper examines the preferred diversification paths for the Saudi economy in more detail, with a focus on the foreseen adjustments in the sectoral composition of the economy along with broader macroeconomic shifts. The evaluation of the foreseen diversification impacts is based on the updated Vision 2030 Input-Output Table that maps the changing structure of the Saudi economy over the coming decade. We discuss the assumed expansion of the diversification frontrunners, their changing contribution to the overall economic activity and identify the preferred diversification paths for the Saudi economy. The advances in economic diversification are measured by applying the Shannon-Weaver index to sectoral GDP and household income. The expected sectoral changes are wide-reaching, so the basic macroeconomic relations are also subject to adjustments. We also conduct a sensitivity analysis to examine the effects of the foreseen diversification on the resilience of the Saudi economy to external shocks.

1.1 Macroeconomic summary Economic recovery has consistently outperformed the technical staff’s expectations following a steep decline in activity in the second quarter of 2020. At the same time, total and core inflation rates have fallen and remain at low levels, suggesting that a significant element of the reactivation of Colombia’s economy has been related to recovery in potential GDP. This would support the technical staff’s diagnosis of weak aggregate demand and ample excess capacity. The most recently available data on 2020 growth suggests a contraction in economic activity of 6.8%, lower than estimates from January’s Monetary Policy Report (-7.2%). High-frequency indicators suggest that economic performance was significantly more dynamic than expected in January, despite mobility restrictions and quarantine measures. This has also come amid declines in total and core inflation, the latter of which was below January projections if controlling for certain relative price changes. This suggests that the unexpected strength of recent growth contains elements of demand, and that excess capacity, while significant, could be lower than previously estimated. Nevertheless, uncertainty over the measurement of excess capacity continues to be unusually high and marked both by variations in the way different economic sectors and spending components have been affected by the pandemic, and by uneven price behavior. The size of excess capacity, and in particular the evolution of the pandemic in forthcoming quarters, constitute substantial risks to the macroeconomic forecast presented in this report. Despite the unexpected strength of the recovery, the technical staff continues to project ample excess capacity that is expected to remain on the forecast horizon, alongside core inflation that will likely remain below the target. Domestic demand remains below 2019 levels amid unusually significant uncertainty over the size of excess capacity in the economy. High national unemployment (14.6% for February 2021) reflects a loose labor market, while observed total and core inflation continue to be below 2%. Inflationary pressures from the exchange rate are expected to continue to be low, with relatively little pass-through on inflation. This would be compatible with a negative output gap. Excess productive capacity and the expectation of core inflation below the 3% target on the forecast horizon provide a basis for an expansive monetary policy posture. The technical staff’s assessment of certain shocks and their expected effects on the economy, as well as the presence of several sources of uncertainty and related assumptions about their potential macroeconomic impacts, remain a feature of this report. The coronavirus pandemic, in particular, continues to affect the public health environment, and the reopening of Colombia’s economy remains incomplete. The technical staff’s assessment is that the COVID-19 shock has affected both aggregate demand and supply, but that the impact on demand has been deeper and more persistent. Given this persistence, the central forecast accounts for a gradual tightening of the output gap in the absence of new waves of contagion, and as vaccination campaigns progress. The central forecast continues to include an expected increase of total and core inflation rates in the second quarter of 2021, alongside the lapse of the temporary price relief measures put in place in 2020. Additional COVID-19 outbreaks (of uncertain duration and intensity) represent a significant risk factor that could affect these projections. Additionally, the forecast continues to include an upward trend in sovereign risk premiums, reflected by higher levels of public debt that in the wake of the pandemic are likely to persist on the forecast horizon, even in the context of a fiscal adjustment. At the same time, the projection accounts for the shortterm effects on private domestic demand from a fiscal adjustment along the lines of the one currently being proposed by the national government. This would be compatible with a gradual recovery of private domestic demand in 2022. The size and characteristics of the fiscal adjustment that is ultimately implemented, as well as the corresponding market response, represent another source of forecast uncertainty. Newly available information offers evidence of the potential for significant changes to the macroeconomic scenario, though without altering the general diagnosis described above. The most recent data on inflation, growth, fiscal policy, and international financial conditions suggests a more dynamic economy than previously expected. However, a third wave of the pandemic has delayed the re-opening of Colombia’s economy and brought with it a deceleration in economic activity. Detailed descriptions of these considerations and subsequent changes to the macroeconomic forecast are presented below. The expected annual decline in GDP (-0.3%) in the first quarter of 2021 appears to have been less pronounced than projected in January (-4.8%). Partial closures in January to address a second wave of COVID-19 appear to have had a less significant negative impact on the economy than previously estimated. This is reflected in figures related to mobility, energy demand, industry and retail sales, foreign trade, commercial transactions from selected banks, and the national statistics agency’s (DANE) economic tracking indicator (ISE). Output is now expected to have declined annually in the first quarter by 0.3%. Private consumption likely continued to recover, registering levels somewhat above those from the previous year, while public consumption likely increased significantly. While a recovery in investment in both housing and in other buildings and structures is expected, overall investment levels in this case likely continued to be low, and gross fixed capital formation is expected to continue to show significant annual declines. Imports likely recovered to again outpace exports, though both are expected to register significant annual declines. Economic activity that outpaced projections, an increase in oil prices and other export products, and an expected increase in public spending this year account for the upward revision to the 2021 growth forecast (from 4.6% with a range between 2% and 6% in January, to 6.0% with a range between 3% and 7% in April). As a result, the output gap is expected to be smaller and to tighten more rapidly than projected in the previous report, though it is still expected to remain in negative territory on the forecast horizon. Wide forecast intervals reflect the fact that the future evolution of the COVID-19 pandemic remains a significant source of uncertainty on these projections. The delay in the recovery of economic activity as a result of the resurgence of COVID-19 in the first quarter appears to have been less significant than projected in the January report. The central forecast scenario expects this improved performance to continue in 2021 alongside increased consumer and business confidence. Low real interest rates and an active credit supply would also support this dynamic, and the overall conditions would be expected to spur a recovery in consumption and investment. Increased growth in public spending and public works based on the national government’s spending plan (Plan Financiero del Gobierno) are other factors to consider. Additionally, an expected recovery in global demand and higher projected prices for oil and coffee would further contribute to improved external revenues and would favor investment, in particular in the oil sector. Given the above, the technical staff’s 2021 growth forecast has been revised upward from 4.6% in January (range from 2% to 6%) to 6.0% in April (range from 3% to 7%). These projections account for the potential for the third wave of COVID-19 to have a larger and more persistent effect on the economy than the previous wave, while also supposing that there will not be any additional significant waves of the pandemic and that mobility restrictions will be relaxed as a result. Economic growth in 2022 is expected to be 3%, with a range between 1% and 5%. This figure would be lower than projected in the January report (3.6% with a range between 2% and 6%), due to a higher base of comparison given the upward revision to expected GDP in 2021. This forecast also takes into account the likely effects on private demand of a fiscal adjustment of the size currently being proposed by the national government, and which would come into effect in 2022. Excess in productive capacity is now expected to be lower than estimated in January but continues to be significant and affected by high levels of uncertainty, as reflected in the wide forecast intervals. The possibility of new waves of the virus (of uncertain intensity and duration) represents a significant downward risk to projected GDP growth, and is signaled by the lower limits of the ranges provided in this report. Inflation (1.51%) and inflation excluding food and regulated items (0.94%) declined in March compared to December, continuing below the 3% target. The decline in inflation in this period was below projections, explained in large part by unanticipated increases in the costs of certain foods (3.92%) and regulated items (1.52%). An increase in international food and shipping prices, increased foreign demand for beef, and specific upward pressures on perishable food supplies appear to explain a lower-than-expected deceleration in the consumer price index (CPI) for foods. An unexpected increase in regulated items prices came amid unanticipated increases in international fuel prices, on some utilities rates, and for regulated education prices. The decline in annual inflation excluding food and regulated items between December and March was in line with projections from January, though this included downward pressure from a significant reduction in telecommunications rates due to the imminent entry of a new operator. When controlling for the effects of this relative price change, inflation excluding food and regulated items exceeds levels forecast in the previous report. Within this indicator of core inflation, the CPI for goods (1.05%) accelerated due to a reversion of the effects of the VAT-free day in November, which was largely accounted for in February, and possibly by the transmission of a recent depreciation of the peso on domestic prices for certain items (electric and household appliances). For their part, services prices decelerated and showed the lowest rate of annual growth (0.89%) among the large consumer baskets in the CPI. Within the services basket, the annual change in rental prices continued to decline, while those services that continue to experience the most significant restrictions on returning to normal operations (tourism, cinemas, nightlife, etc.) continued to register significant price declines. As previously mentioned, telephone rates also fell significantly due to increased competition in the market. Total inflation is expected to continue to be affected by ample excesses in productive capacity for the remainder of 2021 and 2022, though less so than projected in January. As a result, convergence to the inflation target is now expected to be somewhat faster than estimated in the previous report, assuming the absence of significant additional outbreaks of COVID-19. The technical staff’s year-end inflation projections for 2021 and 2022 have increased, suggesting figures around 3% due largely to variation in food and regulated items prices. The projection for inflation excluding food and regulated items also increased, but remains below 3%. Price relief measures on indirect taxes implemented in 2020 are expected to lapse in the second quarter of 2021, generating a one-off effect on prices and temporarily affecting inflation excluding food and regulated items. However, indexation to low levels of past inflation, weak demand, and ample excess productive capacity are expected to keep core inflation below the target, near 2.3% at the end of 2021 (previously 2.1%). The reversion in 2021 of the effects of some price relief measures on utility rates from 2020 should lead to an increase in the CPI for regulated items in the second half of this year. Annual price changes are now expected to be higher than estimated in the January report due to an increased expected path for fuel prices and unanticipated increases in regulated education prices. The projection for the CPI for foods has increased compared to the previous report, taking into account certain factors that were not anticipated in January (a less favorable agricultural cycle, increased pressure from international prices, and transport costs). Given the above, year-end annual inflation for 2021 and 2022 is now expected to be 3% and 2.8%, respectively, which would be above projections from January (2.3% and 2,7%). For its part, expected inflation based on analyst surveys suggests year-end inflation in 2021 and 2022 of 2.8% and 3.1%, respectively. There remains significant uncertainty surrounding the inflation forecasts included in this report due to several factors: 1) the evolution of the pandemic; 2) the difficulty in evaluating the size and persistence of excess productive capacity; 3) the timing and manner in which price relief measures will lapse; and 4) the future behavior of food prices. Projected 2021 growth in foreign demand (4.4% to 5.2%) and the supposed average oil price (USD 53 to USD 61 per Brent benchmark barrel) were both revised upward. An increase in long-term international interest rates has been reflected in a depreciation of the peso and could result in relatively tighter external financial conditions for emerging market economies, including Colombia. Average growth among Colombia’s trade partners was greater than expected in the fourth quarter of 2020. This, together with a sizable fiscal stimulus approved in the United States and the onset of a massive global vaccination campaign, largely explains the projected increase in foreign demand growth in 2021. The resilience of the goods market in the face of global crisis and an expected normalization in international trade are additional factors. These considerations and the expected continuation of a gradual reduction of mobility restrictions abroad suggest that Colombia’s trade partners could grow on average by 5.2% in 2021 and around 3.4% in 2022. The improved prospects for global economic growth have led to an increase in current and expected oil prices. Production interruptions due to a heavy winter, reduced inventories, and increased supply restrictions instituted by producing countries have also contributed to the increase. Meanwhile, market forecasts and recent Federal Reserve pronouncements suggest that the benchmark interest rate in the U.S. will remain stable for the next two years. Nevertheless, a significant increase in public spending in the country has fostered expectations for greater growth and inflation, as well as increased uncertainty over the moment in which a normalization of monetary policy might begin. This has been reflected in an increase in long-term interest rates. In this context, emerging market economies in the region, including Colombia, have registered increases in sovereign risk premiums and long-term domestic interest rates, and a depreciation of local currencies against the dollar. Recent outbreaks of COVID-19 in several of these economies; limits on vaccine supply and the slow pace of immunization campaigns in some countries; a significant increase in public debt; and tensions between the United States and China, among other factors, all add to a high level of uncertainty surrounding interest rate spreads, external financing conditions, and the future performance of risk premiums. The impact that this environment could have on the exchange rate and on domestic financing conditions represent risks to the macroeconomic and monetary policy forecasts. Domestic financial conditions continue to favor recovery in economic activity. The transmission of reductions to the policy interest rate on credit rates has been significant. The banking portfolio continues to recover amid circumstances that have affected both the supply and demand for loans, and in which some credit risks have materialized. Preferential and ordinary commercial interest rates have fallen to a similar degree as the benchmark interest rate. As is generally the case, this transmission has come at a slower pace for consumer credit rates, and has been further delayed in the case of mortgage rates. Commercial credit levels stabilized above pre-pandemic levels in March, following an increase resulting from significant liquidity requirements for businesses in the second quarter of 2020. The consumer credit portfolio continued to recover and has now surpassed February 2020 levels, though overall growth in the portfolio remains low. At the same time, portfolio projections and default indicators have increased, and credit establishment earnings have come down. Despite this, credit disbursements continue to recover and solvency indicators remain well above regulatory minimums. 1.2 Monetary policy decision In its meetings in March and April the BDBR left the benchmark interest rate unchanged at 1.75%.