Abstract
This paper aims to investigate the time-varying influences of major crude oil-producing countries on Brent oil prices, with seven-panel data over the observation years of 1998 to 2018. We create seven panels with 36 monthly data for each and estimate the contributions of individual producing countries to oil price changes with a multivariate regression technique of ordinary least squares. Most existing researches have focused on identifying relationships among oil price, market fundamental factors, macroeconomic variables, and geopolitical events in broad perspectives. However, this paper undertakes a longitude/panel analysis of nine oil producers’ influences, with the Organisation for Economic Co-operation and Development (OECD) consumption and the U.S. Dollar Index (USDX) on oil prices in each panel and intends to identify which producers have statistically significant influencing weights on oil prices. We believe that this research contributes to the body of knowledge in better understanding the relative impacts of major oil-producing countries. Results show empirical evidences that the Organization of the Petroleum Exporting Countries (OPEC) production stayed as the greatest negative influence on the oil price in the periods of Panel 2 (2001–2003) and Panel 7 (2016–2018) only, while the U.S. Dollar Index took over the OPEC’s influencing role in most of the other periods, followed by Iran, the U.S., and China.
Highlights
Crude oil is a critical source for economic growth and further industrialization, and the industrialized nations import a significant portion of oil from the Persian Gulf [1]
This paper aims to investigate the influencing weights of major crude oil-producing countries on the Brent oil price in seven individual panels with 36 monthly data each
We investigated the relationships between Brent oil price and major producers’ volumes to identify influencing weights of major crude oil producers in the world oil market, as well as those of petroleum consumption of OECD countries and the U.S Dollar Index (USDX), with seven panels of 36 monthly data each across the years of 1998 to 2018
Summary
Crude oil is a critical source for economic growth and further industrialization, and the industrialized nations import a significant portion of oil from the Persian Gulf [1]. While the WTI and Brent benchmark prices are for oil exports to the Atlantic Basin [3], the Brent crude price index is a benchmark to set oil prices for 70% of world oil transactions [4]. The crude oil with high API gravity has low density and light weight, while the oil with high sulfur content is called a sweet oil [3,5,6]. The WTI oil is very sweet high-quality, and the index is the most famous benchmark in the U.S and the Western Hemisphere, with its future’s products traded on the
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