Domestic Oil Prices Research Articles

Do Supply Chain Pressures Affect Consumer Prices in Major Economies? New Evidence from Time-Varying Causality Analysis

This study explores the dynamic causality between the consumer price index and supply chain pressure index in two large economies. Despite extensive research into the role of supply chains at the firm level, literature on their impact on time-varying inflation and macroeconomic stability is scarce. Using data from the United States and the European Union from January 2000 to December 2021, we employ novel time-varying causality techniques to examine the evolving relationships among inflation, supply chains, real gross domestic product, interest rates, and oil prices. Our findings show that supply chains have a significant dynamic relationship with consumer prices, particularly during economic crises like the 2008 global financial crisis and the COVID-19 pandemic. Robustness tests including impulse response functions and the autoregressive distributed lag model confirm this causality. These results are critical for policymakers, emphasizing the importance of supply chains in controlling inflation and achieving global economic resilience and stability.

Heterogeneity of regional carbon emission markets in China: Evidence from multidimensional determinants

The Chinese carbon markets are heterogeneously distributed with different regional economies and natural resource endowments. This paper examines how carbon prices behave across regional emission markets in China using the dynamic model averaging (DMA) approach. The results show that the Beijing, Guangdong, and Hubei markets are increasingly affected by various factors. In contrast, the Shanghai market gradually becomes less affected after 2020, both in the current and forecast periods. Moreover, geopolitical risk and new energy price are important variables for the concurrent relation, and domestic oil price and geopolitical risk are important variables for predicting carbon prices. Nevertheless, there are significant differences in intensity and signs among the four carbon markets affected by various factors, as well as large differences between the results for the current and forecast periods. These results indicate the heterogeneity of regional carbon markets; therefore, caution should be taken when using a single carbon market to represent the entire Chinese market.

STAD-GCN: Spatial–Temporal Attention-based Dynamic Graph Convolutional Network for retail market price prediction

As technology advances, competition among market players intensifies, highlighting the importance of comprehending both one’s own and competitors’ pricing strategies. Traditional approaches often rely on static factors for price forecasting, disregarding the dynamic nature of market competition. In contrast to methods utilizing a static graph structure and uniform weights for predictions, we introduce STAD-GCN (Spatial–Temporal Attention-based Dynamic Graph Convolutional Network). This innovative model dynamically incorporates competitive factors into price prediction by employing attention mechanisms and graph convolution operations. Such an approach allows for the adaptation of graph structures and node relationships in response to temporal and spatial changes, offering a more nuanced understanding of market dynamics. To test STAD-GCN, we utilized international and domestic oil price data alongside specific gas station details from the South Korea National Oil Corporation, focusing on Seoul and Busan. The model presents remarkable performance, achieving mean absolute errors of 12.648 in Seoul and 11.242 in Busan, surpassing state-of-the-art models. Based on the findings of our research, we present some academic and practical implications, as well as several future research directions.

THE EFFECT OF CRUDE OIL PRICE VOLATILITY ON INFLATION IN INDIA: EVIDENCE FROM ARDL APPROACH

India has been experiencing the issue of rising crude oil prices since 2017, after a low-price regime from 2014 to 2017. Inflation was also moderate during the low-crude oil price regime. It has been empirically seen that a rise in crude oil prices exerts a significant impact on the inflationary situation of the nation. Rising oil prices and their spillover into higher general price levels might exacerbate the crisis in a nation that is already struggling with the declining demand for investment and consumption. The domestic oil price needs to be controlled by the government to boost demand while controlling inflation without putting further stress on the populace. Against this background, the present research aims to investigate the relationship between the crude oil price and the inflation rate in the nation using the data from 1991 to 2020 (before Covid years). This paper also aims to investigate the effect of crude oil prices and inflation on economic growth in India. The paper has used an Autoregressive Distributed lag model to investigate the long-run and short-run association between them. Our analysis shows that the prices of crude oil have a statistically significant impact on India’s inflation rate over the long and short terms. KEYWORDS: Inflation, Crude oil price, India, Spillover, ARDL, Granger Causality, GDP

External Shocks and Business Cycles in Nigeria: Accounting for the Roles of Domestic Oil-Refining Alternative and Oil Price Fiscal Rule

The paper investigates the role of oil price fiscal rule (OPFR), and functional domestic oil refineries in curtailing the effects of external shocks on the Nigerian economy. A dynamic stochastic general equilibrium (DSGE) model is developed, calibrated and estimated using Random Walk Metropolis sampling method. The model is estimated under the benchmark, OPFR-only, and refinery-only scenarios. The results reveal that building or revamping domestic oil refineries may help the economy to withstand long term shock, but in the short run, the OPFR clearly emerges as the most potent. The non-oil external shocks are not significant under the three scenarios. However, oil-related external shocks have significant implications for business cycles in Nigeria, reinforcing the demand- and supply-side shocks. Furthermore, it is found that there is a need for functional domestic oil refineries in insulating the economy against external shocks, however, there is a huge welfare loss associated with refinery development alone. Thus, policymakers should consider instituting the OPFR to stem external shocks in the short run, while building oil refineries to tackle external shocks in the long run.

INDONESIA'S POLICY OF PALM OIL EXPORTS BANNED IN THE CURRENT WORLD ENERGY CRISIS

This paper aims to determine the impact of tariff and non-tariff barriers, the ban on exports of palm oil commodities, and the energy crisis due to the Russia-Ukraine war on the Indonesian and world economies. The research was conducted because it wanted to know the impact of the policies carried out by the Indonesian government as the largest producer of palm oil in the world and whether it produced a spillover effect on the economy. The objective is to examine the policies set by the government, namely tariff or non-tariff barriers, and their impact on trade. The Indonesian government implemented a policy banning palm oil exports from reducing the sharply rising local palm oil prices and meeting domestic demand. The policy was implemented in March 2022 and required further research to analyze its impact. This study used the GTAP database analysis tool in 2011. This study includes shocks in tariff and non-tariff barriers on palm oil commodities. The shock that was included to represent the energy crisis was a ban on exports and imports to Russia and a ban on food exports in Ukraine. The study results using the GTAP analysis tool, namely the determination of the export ban on palm oil commodities, had a positive impact, namely reducing the price of domestic palm oil, but the negative impact was the level of output, and the number of workers fell. Increasing export tariffs is not effective and increases domestic palm oil prices. Government policies that are carried out must ensure that domestic palm oil has stocks that meet consumption at affordable prices. The government must implement policies that protect consumers and producers of palm oil. Policies that the government can carry out are mitigating safety nets and distributing aid directly to affected society.

Uncertainty and investment: Evidence from domestic oil rigs

AbstractWe provide new evidence on the response of investment to uncertainty, using granular and high‐frequency (weekly) data on domestic oil drilling and oil prices since 2012, corresponding to the period of widespread horizontal drilling and hydraulic fracturing in the United States. Weekly data permits much weaker identifying restrictions than is required with monthly data that is common in the literature. We measure domestic drilling activity by the number of rigs drilling for oil, and we measure oil uncertainty by implied volatility from options on oil futures and the return on delta‐neutral straddles from options on oil futures. We show that the number of oil drilling rigs are tightly linked to both oil prices and oil uncertainty, and we find that oil uncertainty significantly decreases the number of drilling rigs, with a one standard deviation increase in uncertainty reducing the number of drilling rigs by up to 5%.

Macroeconomic determinants of stock market returns: Evidence from Oman

This paper aims to analyze the long- and short-term effects of macroeconomic factors on stock market returns in the Sultanate of Oman, particularly the effects of inflation (CPI), interest rates (IR), foreign exchange reserve (FER), money supply (M2), per capita gross domestic product (GDP), trading balance (TB), and oil prices (OP) on the returns of the main index of the Muscat Stock Exchange (MSX30). Additionally, the paper aims to examine whether the effects changed after the low oil price crisis at the end of 2014. The autoregressive distributed lag (ARDL) model was employed to analyze quarterly data for the full sample period (2009 Q2–2022 Q4), and for the oil price crisis period (2014 Q4–2022 Q4). The findings indicate that FER and per capita GDP had positive long-term effects on the returns of the MSX30, while M2 had a negative effect. It was also found that FER and OP had a negative effect in the short run, and the short-term impact of IR and TB were positive. Moreover, the findings during the oil price crisis indicate that the M2 continued to have a negative long-term impact, while in the short run, FER had a positive impact and TB had a negative impact.

The influence of shadow economy, environmental policies and geopolitical risk on renewable energy: A comparison of high- and middle-income countries

Given the alarming rate of climate change and environmental degradation, major countries are seeking ways to curtail environmental damage and attain sustainability in the future. In the quest for a green economy, countries are motivated to adopt renewable energy that can assist in resource conservation and efficiency. Accordingly, this study examines the diverse effects of the underground economy, environmental policy strictness, geopolitical risk, gross domestic product, carbon emissions, population, and oil prices on renewable energy for 30 high- and middle-income countries from 1990 to 2018. The empirical outcomes based on quantile regression document significant variations across two country groups. For instance, for high-income countries, the shadow economy has a detrimental effect across all quantiles but it is statistically significant at the top quantiles. Nonetheless, the effect of the shadow economy on renewable energy is detrimental and significant statistically across all quantiles for middle-income countries. In the context of environmental policy stringency, the effect is positive across both country groups, though there is heterogeneity in outcomes. Geopolitical risk has a positive influence on the deployment of renewable energy for high-income countries but negatively impacts renewables for middle-income countries. As far as policy suggestions are concerned, the policymakers of both high- and middle-income countries need to take steps to constrain the growth of the shadow economy by adopting effective policy strategies. Policies need to be implemented for middle income-countries to reduce the unfavorable effect of geopolitical uncertainty. The findings of this study contribute to a better and more precise understanding of factors shaping the role of renewables whereby the energy crisis would be mitigated.

The impact of world oil price shocks on macroeconomic variables in Vietnam: the transmission through domestic oil price

This study examines the impact of world oil price shocks on macroeconomic variables in Vietnam with a focus on the transmission channel of domestic oil prices. The Structural Vector Autoregression model with two blocks of real economy variables and monetary variables is employed. The world oil price follows an autoregressive process to reflect the exogenous nature of world oil price shocks to the domestic economy. The retail domestic oil price is determined simultaneously by only the world oil price due to the government's control of the domestic oil market. Using monthly data in the period between 2009 and 2021, the study indicates that a positive shock to world oil prices will increase the domestic oil prices significantly, industrial production (slightly and only statistically significant in the third month after), and inflation (significantly in 8 months). Besides, the domestic oil price is not the only transmission channel of world oil price shocks to the economy. This result implies forecasting, assessing, and controlling the impact of the world oil price shock on the economy should focus on both domestic oil prices and other indirect channels.

Statistical Modeling of the Determinants Driving the Electricity Demand in Jordan

The paper introduces a statistical model that connects the electrical demand in Jordan with several determinants that have a direct impact on the electrical consumption and load profile during the study period from 2007 to 2020. The period was selected as it is characterized by several global events that directly impacted Jordan’s economy and energy sustainability in Jordan, such as the Arab spring protests, the civil war in Syria, and the global financial crises. Many determinants that are used in the regression analysis imply the ambient temperature, day of the week, population, gross domestic product (GDP), oil price, and technological factors related to renewable energy projects. Results show that temperature and population positively impact the demand, whereas GPD, population, oil prices, and renewable energy negatively impact the electricity demand. The results obtained from backcasting regression analysis for the hourly 4745 data set covering 13 years period reveals reasonable error metrics with MAE, MAPE, and RMSE values of 134, 6.3% and 2.76%, respectively. The government must encourage investments to exploit and explore the massive potential of available energy resources such as oil, natural gas, oil shale, and uranium to resolve the problems related to the high global oil prices and high dependency on imported energy. Also, it is required to enable the transition from fossil fuels to renewable energy through financial incentives and tax exemption to encourage investments in clean energy, rebuild a new traffic system showing the volatile electricity prices, which are still unknown and finally remove obstacles and facilitate the ongoing projects, reaching a state of stakeholder buy-in engaging with the projects.

Determinants of stock market modern development: Evidence from Vietnam

The paper estimates the macroeconomic variables affecting the stock price in Vietnam from 2009 to 2019. Based on the used autoregressive distributed lag (ARDL) model, the test shows a co-integration between stock prices and macroeconomic factors. The findings explore the optimal delay in the ARDL model as (1, 2, 1, 2, 0, 0, 2). Concretely, statistically significant evidence proves that the consumer price index, gross domestic product, interest rate, money supply, and oil price are the determinants of the stock price in Vietnam. In particular, the consumer price index and GDP have a direct relationship with the stock market, while interest rate, money supply, and oil price have opposite effects.

Preparation of LiFePO4/C cathode material by extracting Fe2O3 from laterite nickel ore by ammonium jarosite method

In the context of the COVID-19 pandemic and the war between Russia and Ukraine, domestic oil prices have skyrocketed. Saving resources and develop lithium ion batteries with excellent performance are particularly important. In view of unreasonable utilization of non-target elements in laterite nickel ore and high energy consumption of traditional sulfate roasting laterite nickel ore, a pioneering idea was adopted to combine laterite nickel ore with LiFePO4, which not only meets the resource saving but also prepares lithium ion batteries with excellent performance, in this study. Using ammonium sulfate roasting laterite nickel ore-ammonium jarosite iron precipitation and hydrolysis preparation of Fe2O3-carbon thermal reduction preparation of LiFePO4/C process means, to achieve the ultimate goal of preparing LiFePO4 from laterite nickel ore. Determining the optimum conditions of each part of experiment by single factor experiment and orthogonal experiment. It was concluded that under the optimal preparation conditions, the discharge specific capacity of lithium ion battery was 164.56 mAh/g at the rate of 0.5 C, and it was 94% of the theoretical capacity. After 100 cycles, we could find that the discharge specific capacity could be maintained at 162.78 mAh/g, and the capacity retention rate still reached 98%.

PENG ARUH VARIABEL MONETER DAN HARGA MIN YAK DOMESTIK TERHADAP INFLASI DI INDONESIA PERIODE 2009 2019

Inflation is one of the references that can be used as a tool to measure or see the economic stability of a country. To maintain stability from inflation, it is necessary to implement monetary policy. This study intends to determine the effect of variables that can affect inflation in Indonesia in 2009-2019. The main variables used in this study are the money supply, interest rates, exchange rates and domestic oil prices due to the finding of gaps between factual data and theory in these variables. The method used is the Partial Adjustment Model (PAM). The results of this study indicate that the money supply, exchange rate, and domestic oil prices have no significant effect on inflation in Indonesia in 2009-2019. Meanwhile, interest rates have a positive and significant impact on inflation in Indonesia in 2009-2019.

Small DSGE Model of the Russian Economy with Heterogeneous Adaptive Learning

Within the framework of this study, a small DSGE model of the Russian economy with heterogeneous adaptive learning of economic agents is being developed. Comparing several modifications of the model through various assessments, building retrospective forecasts, calculating error measures, it is concluded that a model with heterogeneous adaptive learning of agents fits the data better than a model with rational expectations or homogeneous adaptive learning. Also, within the framework of the constructed model, the best rule of monetary policy is determined; according to it, the Central Bank should take into account not only inflation and output, but also respond to the exchange rate and the domestic oil price. The model constructed in this paper can potentially be used as a not very cumbersome tool for analyzing and forecasting the dynamics of the Russian economy, and the resulting conclusions about the optimal policy can be used to form the economic policy of the state.

A Feasibility Study of Utilizing Nuclear Energy for an Existing MED-TVC Desalination Plant

This study aims to investigate the viability of using a nuclear heating reactor to supply energy and replace the used fossil crude oil energy supply of an existing MED-TVC (Multi-Effect Distillation-Thermal-Vapor-Compression) desalination plant located in Saudi Arabia. The MED-TVC, with a 91,200 m3/day capacity, was simulated using Aspen Plus®. The MED-TVC desalination plant was built in a parallel arrangement with oil-fired steam boilers, and it uses Red Sea water with a salinity of about 45,000 ppm. The simulation results of the MED-TVC are in good agreement with the actual data of the existing desalination plant. The heat required to operate the existing MED-TVC was determined to be 169 MW (th). This amount of heat was utilized as an input to DEEP (Desalination Economic Evaluation Program) to evaluate the production cost of fresh water using nuclear energy instead of fossil fuel. An economic comparison between the two energy sources was carried out in this study. The production cost of freshwater was estimated to be USD 1.38/m3 when using a nuclear reactor. In contrast, the estimated production cost was USD 0.95/m3 when using oil-fired boilers at a subsidized oil price of USD 4.4/bbl. The economic analysis has considered the discounted domestic crude oil prices in Saudi Arabia. Nuclear energy is cost-competitive with oil if Saudi Arabia raises the price of domestic crude oil to more than USD 15 per barrel or imposes a carbon tax of at least USD 20 per ton of greenhouse gas emissions.

The Transmission Mechanisms and Impacts of Oil Price Fluctuations: Evidence from DSGE Model

This paper constructs an open economy dynamic stochastic general equilibrium (DSGE) model with oil to investigate the transmission mechanism and impact effects of oil price fluctuations driven by different factors on China’s macroeconomy using quarterly data from 1996 to 2019. The results show that the international crude oil supply-driven oil price decline promotes positive output growth in the short run through the positive cost effect of the supply channel, and the production regulation cost will dampen the incentive to invest in the new energy sector in the long run. Domestic economic development demand-driven oil price increases act on the demand channel, driving output and oil prices to fluctuate in the same direction, generating a negative real balance effect on the economy through the interest rate channel. The oil-specific demand driven by foreign nominal interest rate shocks is transmitted through the exchange rate channel, triggering imported inflation, lower aggregate demand, and lower output. Different sources of oil price fluctuations have different transmission mechanisms and thus differential effects. For this reason, based on the root causes of oil price fluctuations, policy recommendations to deal with international oil price fluctuations in the new situation are proposed at the supply level, demand level, and international level.

Presidential Policies’ Effects on Oil and Gas Price and Productions Within the United States from 1977-2021

Amidst the ongoing COVID-19 pandemic, the contentious U.S. 2020 presidential election featured candidates with quite different stances on regulating the oil and gas industry, leaving many to question the longevity of fossil fuel use. However, little research explores the relationship between presidential policies and the oil market. In this paper, extensive research into presidential energy policies and their effects on domestic oil prices and production dating back to 1977 helps us identify whether we can predict the industry’s future under Joe Biden’s administration. The paper’s results suggest the domestic oil industry is more dependent on external foreign events – with presidential policies offering almost negligible effects on prices and production.

The Effectiveness of Monetary Policy in Neutralizing Oil Price Fluctuations on the Gross Domestic Product in Iraq for the Period (1990-2019)

The research aimed to measure the reality of monetary policy and its role in neutralizing the impact of fluctuations in total domestic oil prices, through the most important monetary policy variable (money supply). An example of this is using a simple technique in the previous example, turning it into a straightforward user interface by (Judd and Kunee). After estimating the impact of the policy with the domestic gross domestic oil prices in Iraq, the effect of fluctuations in the domestic gross domestic oil prices in the simple regression model, while the morale of oil prices was not proven with a negative sign, while the morale of money supply and their impact on the increase of the domestic was proven in the multiple regression model. Statistically, interpreting this indicates that the participation of other variables to oil prices in the graph of the rate of impact absorption and a negative impact was achieved in the nature of the original variable, and through the analysis of the path and direct graph of oil prices on the GDP, the evaluation of the Iraqi economy is equal to 95% of public revenues. It amounts to 60% of Iraq's GDP. A constant source of shocks because it is associated with cheap prices. In the light of this, the research reached a recommendation to reduce dependence on oil revenues, as it represents a permanent source of shocks due to its association with oil prices, which represents an external variable subject to market price fluctuations and the tendency to rely on other alternative sources of activating other sectors

The influence of the Shanghai crude oil futures on the global and domestic oil markets

The newly established Shanghai crude oil futures market provides a natural experimental setting for studying the price cointegration and causal relationships between the Chinese domestic benchmark (Daqing) and international benchmarks (West Texas Intermediate and Brent). We find a significant change in the relationships between domestic and global oil prices before and after the launch of the Shanghai market. Moreover, using a Johansen cointegration test and a vector error correction model, we find long-term equilibrium and short-term relationships between the Shanghai market and global benchmarks. Shanghai crude oil futures prices also play a leading role in the price discovery of domestic crude oil spot prices, reflecting their dominant influence on the domestic market. The prices of the domestic crude oil market are thus becoming less influenced by global benchmarks but more influenced by the Shanghai crude oil futures market. The examined results of dynamic ARDL simulations model support the long run and short run relations between the Shanghai market and global benchmarks. The results also shows that the Shanghai crude oil futures market has response lags relative to those benchmarks.