Supply shock


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Supply shock

An event that influences production capacity and costs in an economy.

Supply Shock

Any sudden event that dramatically but (usually) temporarily increases or decreases supply for one or more goods or services. The event may result from government intervention, such as a change in money supply, or may be a random occurrence in the market. For example, a sudden discovery of oil in a field previously thought mainly dry will increase the supply of oil, which will lower the price, assuming demand remains constant. See also: Demand shock.
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This article examines the shift in the behavior of labor productivity over the business cycle and assesses the supply shock and structural change explanations for the shift.
A positive demand or supply shock increases vacancies and the job-finding and job-creation rates, and it decreases the separation and job-destruction rates.
Analyst Rob Chang of Cantor Fitzgerald termed the output cut "earlier than expected", adding that the latest supply shock will boost strength in spot uranium prices.
While insurers gauge the probability of a large catastrophic event or some latent liability, these scenarios still cause a supply shock.
Another potential supply shock could come from a natural disaster such as a destructive hurricane in the Gulf of Mexico or another devastating wildfire in Canada.
William Adams, head of research at FastMarkets, said in a forecast and analysis report for the third quarter of 2016 that while nickel prices could be very volatile, available stocks were ample enough to dampen any supply shock.
Conversely, if they move in opposite directions, QNB interprets this as being driven by an oil supply shock.
In contrast, a supply shock affects global oil production and oil prices simultaneously.
Oil supply shock trade is not expected to last that long.
However, as long as supply shock exists in Libya, Iraq, Sudan, Yemen, and Nigeria at a time when theworld economy experiences the first synchronised recovery since 2007, it isdifficult to envisage a sustained fall in crude oil prices.
org/events/boom-bust-how-export-restrictions-imperil-americas-oil-gas-bonanza A once-in-a-generation supply shock is transforming global energy markets, lowering crude oil and natural gas prices, and quickly making the United States the world's largest producer of oil and gas.
Summary: Maria van der Hoeven, Executive Director of International Energy Agency (IEA), in her own words talk about how North America has set off a supply shock that is sending ripples throughout the world and in the end, not everyone will be a winner