Dynamic Modelling and Control of the Oil Market

Dynamic Modelling and Control of the Oil Market: An Economic Engineering Approach

Orie, Nicolaas (TU Delft Mechanical, Maritime and Materials Engineering)

Mendel, Max (mentor)

Delft University of Technology

Mechanical Engineering | Systems and Control

2020-01-24

This thesis develops dynamical state-space models of the oil market and suggests opportunities for the application of control theory. The emphasis of this thesis is on the modelling, rather than the control theory applications. Most models that are currently employed by oil companies do not model short-term transient responses, but focus on long-term equilibrium modelling. Short-term transient response modelling of oil-economic systems can benefit trading and supply activities of oil companies. The models that are provided in this thesis have the ability to model short-term transient responses, due to the their dynamical nature and economic basis. To obtain these models, this thesis uses economic engineering. Economic engineering is a discipline that models economic systems, using an analogy between economic variables and engineering variables. The model development in this thesis consists of three parts. First, a fundamental economic-engineering model is built that represents the global crude-oil market. The model forecasts crude-oil prices using global crude-oil production as an exogenous input. The parameters of this model are estimated using system identification. Second, this thesis provides specialized models for common oil-market phenomena within the economic-engineering framework. These include refinery modelling, geographic dispersion, the futures market and economic growth. Finally, this thesis suggests applications for control theory. For these applications, various controllers are discussed. The identified fundamental model yields positive first results that do no reject the validity of the modelling approach. Moreover, the specialized models provide satisfactory solutions for several oil market mechanisms.

Control
Economics
Economic-Engineering
Modelling
Oil market

http://resolver.tudelft.nl/uuid:d80377f9-c169-4f7a-afcb-f4781a0e4db8

Student theses

master thesis

© 2020 Nicolaas Orie