Oil Price Changes Research Articles

Disturbing Effects of Global Oil Price Changes: Case of Azerbaijan

General topic in this paper is the role of oil industry in global economy and the result of changing oil prices on economic variables in Azerbaijan. The major aim is to analyze the effects of crude oil price changes on Azerbaijan economy in order to measure how changes in oil prices affect its basic economic variables. At the beginning, a general outlook on oil industry will be given and the main oil exporting economies will be analized. However, main focus will be on the structure of Azerbaijan’s economy and it will examine the example of Azerbaijan as a transition economy where oil and gas production and exports have steadily increased from the mid ‘90s. Many critical oil and gas extraction projects have been implemented; while the oil and gas sector's dominance in the economy poses a number of threats to the balanced development of the country's economy. It will show how the economy of Azerbaijan was affected after the oil crisis, such as other developing countries that mainly depending on oil and petroleum products. For this purpose, VEC Model has been applied, consdering Azerbaijan Statistic Data and analized the effects of oil price fluctuations on its economic variables parallel with the oil industry. The main findings indicate that Azerbaijan's economy is strongly dependent on resource exports, which produce high growth rates when commodity prices are favorable, but end up with lower macroeconomic performance when global oil prices fall. It is clear that the main income of Azerbaijan comes from oil and oil products, so the export of oil will have a high impact on the saving level of the population. At the time of high revenues come from export and the low exchange rate of the foreign currency in Azerbaijan has also led to the low cost of imported goods. As well demonstrated in the research, Azerbaijan economy has been widely exposed to major crude oil price distortions. It can be said that in order to avoid increasing overdependence on oil earnings, diversifying the economy should be a top priority.

Understanding the Dynamics of Oil Price Shocks and Stock Market Volatility in Pakistan: A Non-Linear Approach during COVID-19

Purpose: This article examines the complex relationship between oil price shocks and stock market volatility in Pakistan during the COVID-19 outbreak. Design/Methodology/Approach: The study used a Non-Linear Autoregressive Distributed Lag (NARDL) model to meticulously explore how oil price fluctuations, specifically supply and demand shocks, affect Pakistan's stock market. Monthly data sets from 2020 to 2022 were utilized for the analysis. Research Findings: The study's significant findings reveal that oil price shocks, except for a demand shock specific to the oil industry, have varying long- and short-term effects on stock market volatility, leading to asymmetry. This asymmetrical impact of oil supply and demand shocks on stock market volatility is confirmed, with no asymmetry observed from oil-specific demand shocks in the short term. These findings hold crucial implications for policymakers and investors in understanding and managing the economic dynamics of Pakistan post-COVID-19. Theoretical Contribution/Originality: This research stands out for its originality in understanding Pakistan's economic dynamics post-COVID-19. It provides unique insights for policymakers and investors to navigate future uncertainties related to oil price changes and market volatility, thereby sparking new avenues of thought and action in the field. Implications/Originality/Value: The practical implications of this study's findings empower policymakers and investors to make informed decisions to stabilize Pakistan’s economy after the pandemic. Specifically, the research provides guidance on managing the behaviour of stakeholders and banks in response to oil shocks, thereby contributing to the economic resilience of the country.

An examination of the Indian small-cap cycle in relation to the U.S. market

The present study examines the Indian small-cap cycle between April 2011 and March 2022. The ordinary least squares (OLS) estimate shows that investors can benefit from investing in the Nifty Small-Cap 100 index by following a proper exponential moving average strategy. The study findings also highlighted that among macroeconomic factors, ‘term spread’ might influence the Nifty Small-Cap 100 index returns (NIFSC100R). The daily returns of the Russell 2000 index, the relative change in international crude oil prices (RCO), and the relative change in the exchange rate between USD and INR (RUSDINR) show no statistically significant impact on NIFSC100R.

Bank equity returns and oil prices: The story from U.S. regional banks during the “shale oil” revolution

Using monthly data from 1998 to 2020, we examine the relationship between equity returns and oil prices employing a multi-factor asset model to a sample of 124 U.S. regional banks classified by levels of oil exposure based on their headquarters’ location. We utilize the period when fundamental changes in innovation undertaken by the U.S. oil and gas industry (known as “shale”, “fracking” or “tight oil” formations) helped the U.S. to become today’s top world oil producer. We split our sample into pre (1998M1 to 2009 M12) and post (2010M1 to 2020M1) “U.S. shale oil revolution” periods. In the initial period, oil price changes have negative impact on equity returns of regional banks with no effects for the national bank sample. In the second period, we find very strong oil price effects on equity returns for the top 10 and top 5 regional bank subsamples, consistent with more local transactions to the energy sector. Quantity effects of changes in oil production are discussed, as well as several robustness checks for asymmetries, threshold values, and inclusion of dividends in total returns.

Asymmetric Effect of Oil Price on Economic Activity: Evidence from Lebanon Using NARDL Model

The aim of this paper is to investigate the impact of oil prices on the real economic activity of Lebanon, represented by the Gross Domestic Product (GDP) while controlling for inflation. For this purpose, this study employs a non-linear auto-regressive distributed lag model (NARDL) that enables to take into consideration the asymmetrical nature of the relationship between these two variables. The empirical findings confirm the asymmetric impact of changes in oil prices on economic activity. Notably, reductions in oil prices positively influence GDP in the long term and exert a more pronounced fluctuating effect compared to increases in oil prices, which are statistically insignificant. In other words, the country’s GDP, serving as a measure of the total value of finished goods and services, does not respond significantly to oil price rises but is influenced by oil price reductions. This empirical analysis focuses particularly on Lebanon, and time series data spanning from 1988 to 2021 are used to explore this relationship. This study guides Lebanon's policymakers, revealing the impact of declining oil prices on economic activity. It highlights growth opportunities amidst challenges like economic crises and corruption. Advocating for prudent policies and strategies, it offers a pathway for sustainable development.

The Asymmetric Relationship between Conventional/Shale Rig Counts and WTI Oil Prices

This work analyses the asymmetric response of conventional and shale oil rig counts to WTI oil price returns. Our analysis shows that the rig count time series exhibited a structural change after the oil glut of 2014. All series are non-stationary in each sub-period but not cointegrated. Therefore, after controlling for possible confounding factors, a vector auto regressive (VAR) model is set up. Our specification accounts for the possible role of oil production and distinguishes between positive and negative oil price changes. It is shown that shale and conventional rig counts reacted differently in each subperiod to signed changes in oil price. Subsequently, by evaluating the response of rig counts to oil price shocks, their intensity and duration over time, we observe that the shale oil rig count reacts more intensively to positive than to negative oil price changes. On the contrary, the conventional rig count exhibits a modest reaction only to positive price changes. Finally, we robustify our findings by focusing on the data of the Permian basin, on the one hand, and the Anadarko, Bakken, Eagle Ford and Niobrara, on the other hand, which are characterized by different patterns in the number of Drilled but not Completed wells.

Oil price shocks pass‐through to domestic prices in Nigeria

AbstractThe study investigated the potential non‐linear impacts of fluctuations in oil prices on domestic prices in Nigeria. Utilising the non‐linear autoregressive distributed lag (NARDL) model, the study revealed the presence of asymmetry in the behaviour of domestic prices. Both forms of oil price shocks were observed to have a negative influence on domestic prices in the short term, with only positive oil price shocks demonstrating statistical significance. However, in the long run, a distinct pattern emerged where a decrease in oil prices significantly affected domestic prices. Additionally, analysis of VAR impulse response showed a consistently negative reaction of domestic prices to oil price shocks, falling below the steady‐state equilibrium. The study concluded that changes in oil prices, in conjunction with other macroeconomic variables, affected the prices of domestic goods in Nigeria, whether in the short or long term. This underscored the complexity of Nigeria's economic landscape. Consequently, it is advisable to prudently invest excess revenue generated from rising oil prices to mitigate the adverse impacts of negative oil shocks on the economy.

The Asymmetric Interaction Between Oil Price Change and Stock Returns of the Renewable Energy Companies in India: A Panel NARDL Approach

The Asymmetric Interaction Between Oil Price Change and Stock Returns of the Renewable Energy Companies in India: A Panel NARDL Approach

Harga minyak, perak, dan indeks pasar Indonesia dalam isu geopolitik global

The circumstances of global geopolitical in 2022 are likely to affect economic conditions in the world, including capital market activities. This study aims to determine the impact of changes in world oil and silver prices on market index conditions in Indonesia from March 1 2022 to December 31, 2022. Throughout the observation period, the Indonesian market index had a small average return and was less risky so it had less than optimal performance. In contrast, silver tends to have optimum performance because it has relatively high average returns and risks. The findings of this study also imply that changes in oil and silver prices tend not to have a significant impact on market indices in Indonesia. Under other assumptions, this study finds opportunities for changes in world silver prices to trigger an increase in market returns in Indonesia.

АНАЛІЗ ФАКТОРІВ ВПЛИВУ ЗОВНІШНЬОГО СЕРЕДОВИЩА ДЛЯ ЦИВІЛЬНОЇ АВІАЦІЇ

In the article, the authors indicate the strategic goals of analyzing external factors in civil aviation. The study identified the key factors that most influence Civil Aviation and for one factor a detailed analysis was made and recommendations for solving problems were given. The purpose of the article is to conduct an analysis of the factors of the external environment for civil aviation and give recommendations on their use. Methods used in the study: comparative analysis, detailing and generalization, comparison and grouping, etc. The hypothesis of the study. The external environment can present not only threats, but also opportunities for the company. Present of the main material. It is only by maximizing the opportunities of the external environment and minimizing the threats that a company can remain competitive and succeed in the market. It is by analyzing the factors of the external environment and forecasting their impact on the company that an organization can quickly adapt to changes and make strategically correct decisions for further development and advancement. The originality and practical significance of the study. The main stage in setting long-term goals and developing an effective strategy is strategic analysis, which should provide a realistic assessment of the company's own resources and capabilities in relation to the state (and needs) of the external environment in which the company operates. Conclusions. On the basis of this analysis, a rational choice of strategies from a possible set of options should be made. The questions arise, how and with what help to make the analysis? Various tools can be used, including PEST-analysis, which will be discussed in our work. Thus, the relationship between the factors of the economic group was identified. The result, based on this analysis, is that increased attention should be paid to changes in oil prices. The final decision is that this factor should be thoroughly investigated, taken into account in the SWOT analysis, and a response program developed

Effect of Crude Oil Price Shock on Inflation and Exchange Rate in Nigeria

The study examined the effect of crude oil price shock on inflation and exchange rate in Nigeria. The study adopted an ex-post facto research design, covering the period between 1990 and 2022. Secondary data were extracted from the CBN Statistical Bulletin and World Development Indicators. Multiple regression technique was used for test of hypotheses. The findings revealed a noteworthy adverse effect of oil price shocks on Nigeria's inflation rate, indicated by a probability value of 0.0180. Additionally, the impact of oil price shocks on exchange rates in Nigeria was also adverse and statistically significant, as reflected by a probability value of 0.047. Moreover, these findings align with established economic theory. The negative effect of oil price shocks on the exchange rate can be explained by the consistent devaluation of the Naira relative to the US Dollar in response to abrupt, particularly negative, changes in oil prices. The study, therefore, recommended that the government should enhance the proportion of funds allocated to the excess crude accounts relative to its revenue expenditures. By doing so, the government can build a financial cushion that can be tapped into when price shocks disrupt the crude oil market. Furthermore, it is advisable to employ contractionary monetary and fiscal policies when price shocks occur. These policies can effectively counteract excessive cost-push inflation that may result from the shocks. By reducing the overall demand in the economy through measures like higher interest rates and reduced government spending, inflationary pressures can be curbed.

ASYMMETRIC EFFECTS OF EXCHANGE RATES ON MALAYSIAN PALM OIL EXPORTS TO CHINA

Fluctuations in exchange rates can induce uncertainty, significantly impacting on a country's exports. The unexpected appreciation or depreciation of a currency can also influence the flow of palm oil exports between Malaysia and China, as it affects the relative prices. The purpose of this study is to investigate whether the effects of exchange rate fluctuations on palm oil exports exhibit symmetric or asymmetric relationship. Additionally, this study endeavors to ascertain the presence of the J-curve phenomenon in explaining the connection between exchange rates and Malaysia's palm oil exports to China. This study employs a quarterly dataset spanning from January 2010 to June 2023 and utilizes the linear and non-linear Autoregressive Distributed Lag approaches. The study's results affirm the presence of asymmetric effects stemming from exchange rate movements on Malaysia's palm oil exports to China. This study found that ringgit depreciation has a positives impact on palm oil exports in the long run. These empirical findings hold significance for policymakers, shedding light on the positive repercussions of palm oil price changes on economic activity, ensuring that all stakeholders in the sector reap the benefits accordingly.

To the test of economic recovery: The swings in energy resource prices

This paper examines how changes in oil prices impact a wide range of economic indicators worldwide, using empirical data, and a vector autoregressive (VAR) model analyzes oil price volatility. In this paper, we use fast Fourier units and multivariate regression to conduct a Granger causality test and find that volatility from 2001 to 2021 significantly affected economic recovery and spending during that period. Even during the global financial crisis, oil price and corporate investment were two of the most stable economic indicators. The COVID-19 pandemic has caused significant changes in economic activity and energy prices, and oil prices and economic growth are linked to the global financial crisis and COVID-19. In particular, the recent decline in oil prices can be traced back to the COVID-19 pandemic and worldwide economic concerns. Information about the COVID-19 pandemic spread between the oil market and banking activities faster than it did during previous global financial crises or COVID-19 breakouts. The results of this study have comprehensive implications on human understanding.

The long-term relationship between oil price changes and economic growth from the perspective of the resource curse: An empirical study from Yemen.

A common conundrum discussed in economic research revolves around the fact that nations endowed with plentiful natural resources often exhibit a lower gross domestic product (GDP). This conundrum is commonly called the "resource curse", where most empirical studies about the effects primarily focused on developed economies. At the same time, limited data is available regarding a burgeoning oil-exporting nation like the Republic of Yemen. This research endeavor aims to investigate the relationship between oil price Changes and Yemen's economic growth. Utilizing annual data spanning from 1990 to 2019, the study employs the auto-regressive distributed lag (ARDL) model to establish the long-term connection between oil price volatility and economic growth over both short and long timeframes. This study's outcomes indicate that oil price Changes have a significant positive relationship with Yemen's economic growth in both the long and short run. Oil rents show a significant negative relationship with economic growth in both the long and short run. The results of GLM, RLS, and GMM robustness checks are consistent with our model results. Based on these findings, we suggest that Yemen should diversify its economy by investing in agriculture and tourism, and focus on human capital, education, and research and development. These steps could reduce the economy's dependence on oil and enhance sustainable economic growth. These empirical insights and suggestions are particularly useful for policymakers as they help build sound external and economic policies to sustain long-term economic growth.

Is the Influence of International Oil Price Changes on Economic Growth Significant in India?

The changes in the price of oil by creating supply-side shocks, inflation risks, and exchange rate risks, generate havoc in the development process of oil-importing countries like India. In this perspective, this study examined the degree and direction of connection among the price of oil and economic growth in India while controlling for the influences of exchange rate, real interest rate, rate of inflation, net inflows of foreign direct investment, and trade openness. The work uses the auto-regressive distributed lag bounds test approach and provides evidence in support of the negative effect of oil price changes on the long-run growth of the Indian economy when net inflows of foreign direct investment and foreign exchange rate exert statistically significant negative effects on this relationship. However, trade openness has a statistically significant positive effect. It is further observed that this long-run relationship has a convergence tendency towards the equilibrium value through short-run adjustments, thereby making the estimated relationship stable. The implication is that international oil price fluctuations can be used to predict the country's long-run economic growth. Besides, a policy effort is required to promote alternative energy consumption at home to keep oil demand under control. Furthermore, trade policies are required to be revisited to boost exports by the country to accommodate the negative effects of increases in the price of oil at the international level on economic growth.

Do Crude Oil Price Fluctuations Affect the Sectoral Stock Returns: Evidence from India

Crude oil is a vital energy source for industrialised and developing countries. Both investors who trade crude oil derivatives and firms that use oil as raw material for production monitor oil supply and demand. Disruption in the flow of oil in the commodity markets, therefore, leads to oil price volatility that affects major economies worldwide. Often, geopolitical and natural conditions could adversely impact the oil price and the financial markets react to such fluctuations in oil prices. This paper analyses the effects of oil price changes on sectorial stock returns in India. Using daily returns of S&P BSE Sensex, S&P BSE Oil & Gas and S&P BSE-Auto sectoral indices from January 2000 to March 2020, we examined the impact of Brent crude oil price fluctuations on the two major sectorial stock indices and overall market index. The results of the Granger causality test show significant results on S&P BSE-Sensex and S&P BSE-Oil and Gas Index Returns except S&P BSE-Auto Index Returns. Further for contemporaneous association between the oil price changes and sectorial returns, we operationalised the simple regression analysis. The results from the regression analysis show statistically significant impact of crude oil price fluctuations on the sectorial returns.

OIL PRICE FLUCTUATIONS AND ITS ECONOMIC IMPACT ON OMAN

Without a doubt, the economy is significantly impacted by changes in oil prices. Our study on oil price fluctuations focused in particular on the impact of oil price volatility on the economy. As discussed in the literature review section, the majority of studies indicate that there is a negative association between oil prices and economic growth. The Sultanate of Oman, in particular, is one of the oil-producing nations that uses large oil resources, which are the most crucial resource in the budget and, as a result, which numerous factors, such as the world's supply and demand as well as natural catastrophes, have an impact on oil prices. OPEC's decisions about how to evaluate these factors provide insight into price volatility and expectations. In this study, we investigate the connection between the Sultanate of Oman's GDP and oil prices. The information gathered spans 20 of years, from 1970 to 2022.he result of our comprehensive research reveals a complex relationship between Omani's economic indicators and oil prices, creating an engaging story about the complexities of the Oman economy. Our methodology, which includes panel data regression, correlation analysis, and comprehensive data analysis, provided key insights into the complex dynamics of this connection. The continuing positive relationship between oil prices and economic indicators in the Sultanate of Oman highlights and amplifies the country's vulnerability to the volatile nature of oil price fluctuations. Oman is directly affected because it is a large oil exporter, as evidenced by the noticeable impact on GDP growth rates and government revenues. The volatile fluctuations in the global oil market are intricately intertwined with Oman's economic fabric.

The Asymmetric Effect Of Oil Price On Food Price And Gold Price?

Economically, the relationships among gold prices, oil prices, and food prices have been a critical factor for every country. This study aims to investigate the asymmetric relationship between gold prices, food prices, and oil prices. As a contribution to the literature, the study also considers the post-COVID-19 pandemic period, which is a crucial event. The study examines whether the changes in global gold and food prices were caused by changes in oil prices, using the asymmetric causality test developed by Hatemi-j, for the period covering 2005:1-2023:10. During the COVID-19 period from 2020:1 to 2023:10, the relationship between variables is discussed separately. The analysis findings for the main period reveal a significant causal relationship between global food prices and oil prices. Furthermore, it has been established that a negative shock in global food prices negatively impacts oil prices, while a positive shock in global food prices positively impacts oil prices. In the mirror period, it is evident that the positive shock in oil prices had a negative effect on gold prices. In the post-COVID-19 period, it has been concluded that the negative shock in oil prices had a positive effect on gold prices. The study has also established a significant causal relationship between global food prices and oil prices. The results obtained according to the new economic conditions that emerged after the COVID-19 pandemic is expected to provide more accurate information to future studies and policy makers.

Impact of Oil Price Volatility on Selected Sectors of the Polish Stock Market

The commodity market has a significant impact on the global economy. Crude oil is one of the most important energy commodities, used to produce gasoline, diesel fuel, jet fuel and many other products. Changes in oil prices can have several different economic effects, by affecting inflation, trade balance, exchange rate, and many other macro- and micro-economic indicators. The main aim of the research is to identify the impact of oil prices on the Polish capital market. The co-movement of WTI Brent returns in relation to the sector indices of the Warsaw Stock Exchange was examined. The oil price impact assessment considers the period from 2014 to 2023. The research shows that out of fourteen indices, a significant relationship was observed in the case of four sectors: WIG Banks, WIG Chemicals, WIG Mining and WIG Fuel. In the case of most of the remaining indices, the correlation coefficients were positive but low.

Are Changes in Crude Oil Prices Predictable?

The oil prices influence the transport sector, and subsequently the profitability of trade and the condition of countries’ economies. Therefore, the prediction of future price changes is of high importance. Said prices can be forecasted by macroeconomic or technical methods of analysis, yet both of those are often questioned. In the article, we present a method for a complex verification of the hypothesis that current prices are not influenced by historical changes in oil prices. To do so we applied an alternative and more precise representation of prices than the most commonly used candlestick representation, i.e. the binary temporal representation and utilized advanced statistical testing. In the paper, we also present the results of empirical research performed on the oil price quotations, with the use of advanced software in C++. The research confirms the sensibility of using technical and fundamental analysis.