Fluctuations In Global Oil Prices Research Articles

How do households cope during aggregate shocks? Evidence from the 2009–2015 oil crisis in Nigeria

The effect of global oil price fluctuations on households' costs of living in Nigeria is examined. We extend the Aggregate Demand/Supply (AD/AS) model by incorporating aggregate shock and idiosyncratic risk with cross-sectional heterogeneity in households' distributions and consumption substitution dynamics. Results from our model show that while positive oil prices reflect higher output, whether growth results from inflation or income-level growth remains unclear ―demand-side inflation will raise price levels, amplify budget constraints and ultimately lower welfare. For the empirical analysis, we use oil prices between 2009 and 2015 and micro-level data from the Nigerian General Household Survey (GHS) collected between 2010 and 2016 in Nigeria. In support, we show that increasing oil prices leads to greater consumption. However, the effect varies heterogeneously ―reflecting households' location and consumption substitution dynamics, adjustments in household size, and labor supply are some coping responses to oil price changes.

The Impact of Russia-Ukraine War on Bangladesh’s Economy: A Supply Chain Perspective and Way Forward

Bangladesh’s economy is facing significant challenges restricting from the Russia-Ukraine conflict, intensified by its status as an oil-importing nation vulnerable to global oil price fluctuations. This study addresses the current perspectives and challenges which include inflationary pressures, trade imbalances, and disruptions in the supply chain, leading to increased expenditures for essential commodities. This research was developed through a systematic literature review based on secondary data, including online databases, journals, and review papers, etc. This exploratory study reveals that policymakers need to diversify energy sources, forge new trade partnerships, and implement measures to bolster economic resilience. The economic fallout from the conflict, surpassing the actual war in cost, has depleted the central bank's reserves, prompting austerity measures. The forex market experiences volatility, contributing to high trade deficits and the highest inflation rate in recent years. Bangladesh must address forex management challenges and formulate prudent policies for economic recovery. The conflict has disrupted global commodity markets, leading to inflationary pressures and increased costs for businesses in Bangladesh, especially larger organizations handling rising raw material costs and weak consumer demand. The rationale of this paper is to evaluate the literature on this aspect and apprehend the global demand, and supply of food and commodities, economic impacts in Bangladesh, challenges in global trade, trade relations, currency fluctuations, inflation, emergency price, and its consequences, recognize gaps and advocate future research itineraries. The paper offers a synopsis and appraisal of the overall economy of Bangladesh and finally navigates a way forward to the policymakers which would unlock further research to develop this sector.

Oil price shocks and macroeconomic dynamics in resource-rich emerging economies under regime shifts

How do global oil price fluctuations affect macroeconomic activity and monetary policy in resource-rich emerging economies? This paper tackles this question by developing a unified emerging market/rest-of-the-world DSGE framework featuring Ricardian and Non-Ricardian households, an oil-producing sector, a fuel subsidy programme, and a regime-switching process. The model is estimated using Bayesian methods, allowing us to be agnostic regarding regime shifts in the monetary policy rule and oil price volatility. Using data for Nigeria, we find substantial empirical support for the regime-switching behaviour and discuss how macroeconomic implications of oil price shocks may vary depending on the nature of the shock, monetary policy responses, and the fuel subsidy policy in place. Apart from providing important insights into the monetary policy transmission mechanism, the paper offers a novel, flexible, and functional model for future policy analysis, especially in resource-rich emerging countries.

The impact of oil price shocks in the global market on some indicators of the Iraqi economy for the period (2004-2020)

The Iraqi economy is characterized as a rentier, unilateral economy that relies almost entirely on the oil commodity, while other productive sectors constitute a small percentage of the composition of the gross domestic product Which made it vulnerable to external shocks represented by fluctuations in oil prices in the global market and an imbalance in its production structure and as a result of the economic and political conditions that Iraq went through as well as fluctuations in global oil prices. It suffered from a weakness in infrastructure, and it greatly affected the Iraqi economy in terms of gross domestic product, the general budget, unemployment, etc. Therefore, it is necessary to know the effects that these shocks have on some indicators of the Iraqi economy, and this is considered an urgent necessity to explore future prospects. This research aims to study the impact of oil price shocks in the global market on some indicators of the Iraqi economy for the period (2004-2020)

Design and Implementation of Smart Petrol Station

The problem that still exists nowadays with the petrol station is the method of operation because the petrol station is currently operated manually. As it is a time-consuming process that increases manpower, other problems are related to accuracy, gasoline smuggling, fluctuations in global oil prices, sales, database management, environmental pollution and others. Traditional methods of monitoring fuel in petrol station by humans on site are unable to meet the expectations for efficiency, accuracy and cost. Therefore, this paper designs an intelligent system of three filling stations, where the three stations are simultaneously displayed on a single web application, and this IoT-based system is implemented to address all the problems. Therefore, this paper presents the design and implementation of three petrol stations in which we are going to measure the level of fuel and show it to central server. internet of things (IoT) based petrol station monitoring system is a good approach to improve monitoring efficiency and to improve management efficiency in stations remotely. simulation results presented in LabVIEW software showed the ability of the system to monitor levels of petrol, detect fire, evaporation and etc.

The Impact of Global Energy Price Volatility on Oil Derivative and Local Price in Jordan: Using DCC-GARCH Model

The central aim of this study is to evaluate the repercussions of global energy price fluctuations on the pricing of local oil derivatives in Jordan, and their subsequent impact on domestic price levels. This research seeks to propose risk mitigation strategies to address the challenges posed by energy price volatility, offering valuable insights for Jordanian policymakers. Given the dearth of understanding among policymakers and industry stakeholders regarding the economic ramifications of global energy prices on local markets, this study posits a statistically significant relationship, at a 5% significance level, between global energy prices, local oil derivative prices, and the prices of commodities and services. To investigate these dynamics, the study employs a DCC-GARCH (Dynamic Conditional Correlation Generalized Autoregressive Conditional Heteroskedasticity) model, utilizing monthly data spanning from Jan:2008 to Mar:2022, encompassing global energy prices, local energy prices, and the consumer price index. The study's findings reveal that fluctuations in global oil prices, specifically the Brent benchmark, have a discernible impact on local oil derivative prices in Jordan. However, the reverse causal relationship is not supported, indicating a unidirectional link from oil prices to oil derivatives. The estimated DCC-GARCH model further quantifies this connection, demonstrating that a 1% increase in Brent oil prices corresponds to a 0.21% increase in local oil derivative prices within Jordan. Moreover, a 1% uptick in local oil derivative prices corresponds to a 0.23% increase in the consumer price index. Based on these research outcomes, it is strongly recommended that measures be explored to effectively manage the volatility of oil derivative prices in Jordan. The implementation of such measures holds the potential to bolster local price stability and foster a more resilient economic environment.

Vulnerability of the Agricultural Commodity Markets in Ghana to Global Oil Price Fluctuations: An Empirical Analysis

Despite the advocacy for climate change goals and encouragement for renewables, crude oil continues to dominate the energy markets. Crude oil price, however, is prone to global price fluctuations. Analyses of these effects on agricultural commodity markets in Ghana is neglected which this study seeks to answer. A nonlinear approach (NARDL) is employed in evaluating the effects of global oil price fluctuation on Ghana’s agricultural commodity market vulnerability, proxied by their producer prices. Different indicators are used since crude price fluctuations might have varying impacts on macroeconomic indicators in both magnitude and signs. Quarterly time series data are sourced from different institutions including data from the Bank of Ghana, FAO, and British Petroleum Statistical Review spanning from 1980: Q1 to 2019: Q4. Empirical results indicate that crude oil price fluctuations have different signs and magnitude for agricultural food commodities prices for both short- and long-runs. The findings of the study bring to bear how the agricultural activities in Ghana respond to variability in global crude oil prices. Policies mitigating changes in prices of animal products ought to be grounded on other issues instead of changes in crude oil prices. Also, programs such as “Planting for Food and Jobs” must be implemented in effectively. JEL Classification: Q02; C32; E31; H23

Role of Inclusive Finance on oil Resource production targets: How Fiscal Pressures influence natural resources policy and green recovery in Gulf countries?

This study considers the impact of fiscal pressures on natural resources policy and green recovery techniques as it explores the effect of inclusive finance on reaching oil resource production targets in Gulf countries. The connection between financial inclusion, oil production targets, and fiscal restrictions is examined in countries heavily dependent on oil resources income. The study examines how global oil price fluctuations and changing environmental rules impact resource management and revenue stability. Developing green initiatives and diversification methods are crucial for reducing fiscal vulnerabilities brought on by the oil market's volatility. Using empirical data and case studies, this study clarifies policy frameworks that balance financial inclusion, oil production, and environmental sustainability. Adopting circular economy models, increasing energy efficiency, and investing in renewable energy sources are recommended for achieving a balanced and sustainable development. Study provides several policy implications for the associates parties on the basis of current research findings.

How does energy finance promote energy transition? Evidence from Shanghai crude oil futures

We examine the energy transition effect of Shanghai crude oil futures (SC). Using Chinese renewable energy firm-level data between 2014q1 and 2021q3, we show that SC can alleviate the inhibitory effect of global oil price fluctuations on energy transition. We further explore three potential underlying mechanisms through which the energy transition effect of SC: reducing the impact of global oil price volatility on firms' business risk, financialized investment, and debt cost. We find the energy transition effect of SC is more pronounced in samples with low-risk resistance. Our paper sheds new light on the real effects of SC on energy transition.

The Impact of Oil Price Volatility on Economic Growth and Stability in Iraq through the Public Expenditure for the Period (2003-2020)

Purpose: The purpose of the research is to analyze fluctuations in global oil prices and identify the factors that control them. The study aims to clarify the nature and characteristics of the international oil market, as well as the relationship between oil, public expenditure, and the economy in rentier countries. The research seeks to provide insights into the economic effects of the dominance of the oil resource and track the trends of oil, public expenditure, economic growth, and development in Iraq. Additionally, the study aims to evaluate the extent to which the fiscal policies pursued by oil rent countries are serving their goals, and to recommend ways to ensure the rationalization of public expenditure and real economic growth in these countries. Theoretical framework: the research is based on several economic theories related to the international oil market and rentier economies. The study uses theories such as supply and demand, rentier state, Dutch disease, and public choice theory to analyze the economic effects of oil revenues in rentier countries, the factors that control the international oil market, and the behavior of governments and policymakers in allocating public funds. Design/methodology/approach: The study adopted the induction method to achieve the objectives of the research and get the intended results by analyzing the data and statistical tables of the sample country. Findings: The research findings suggest that oil rents lead to inefficiency, increased centralization of power, and patterns of public expenditure that decrease efficiency. Rentier economies face challenges in diversifying and reducing their dependence on oil exports. Adherence to budgets and developing transparent and flexible principles is crucial for real economic growth in rentier economies. Effective management of oil revenues and public expenditure is essential for sustainable economic growth in these economies. Research, Practical & Social implications: The research has practical implications for policymakers, emphasizing the need for effective management of oil revenues and public expenditure for sustainable economic growth. Social implications relate to the impact of oil revenues on society, highlighting the need for improved living standards and reduced poverty. Originality/value: The research is valuable as it provides original insights into the economic effects of oil rents and highlights the challenges faced by policymakers in managing rentier economies. The study's emphasis on effective management of oil revenues and public expenditure and the development of transparent and flexible principles adds value to the literature. The research provides valuable insights into the international oil market and emphasizes the importance of sustainable economic growth.

The Impact of Global Oil Price Fluctuations on Economic Growth in Iraq by using VAR Model

In this research economic growth is one of the concepts that developed and developing countries alike have been taken into account. This research touched on the most important components of the Iraqi oil sector. The role of this sector and the extent of its contribution to the gross domestic product, which is denominated in US dollars according to a base year 2010. Therefore, it became necessary to clarify the concept of economic growth. Thus, it became necessary for Iraq to maximize the rates of economic growth, which was closely linked to the oil sector, which has become the only sector that feeds the rest of the sectors. The researcher adopted a set of standard formulas to demonstrate the impact of oil price fluctuations on Iraqi economic growth, and concluded that: Vector Auto Regression model (VAR) is the model adopted for the data of the variables of the Iraqi economy. After conducting an estimation, it was discovered that the linear formula produced the best results and had the highest value for the determination coefficient, and that the Cranger causality test revealed the existence of a statistically significant reciprocal relationship between the variables considered for the period 1970-2015.

The future of the shale industry in light of the fluctuations in global oil prices

During the twentieth and twenty-first centuries, the oil industry has been pivotal in influencing all countries’ geopolitical, economic, and human development strategies. Until recently, the debate was about peak oil and what would happen after oil finished. However, due to technological advances and hydraulic fracturing, shale oil formations have become economically viable due to the United States’ desire to achieve energy security to make a qualitative shift in the oil industry and the geopolitics of oil. Therefore, this paper deals with an economic model that illustrates the impact of oil price fluctuations to the shale oil and gas companies by analyzing the main determinants of continuity of shale oil and gas companies in production if global oil prices decline or rise. In addition, the study will investigate the effects of OPEC+ policy and Covid-19 on the future of shale oil industry. The study will discuss some future scenarios for global energy trends and predict what the shale industry will look like in the future. The study concluded the shale industry faces an internal destructive process (within the industry itself) and external (Renewable energy, OPEC and Covid-19). The stability of oil prices is a critical factor that promotes the shale industry's recovery. However, shale industry is expected to continue with low productivity growth rates and continuing government support for it.

Asymmetry effect of oil price shocks and the lagging effect of oil price jumps: Evidence from China's automobile markets

Considering the close relationship between the automobile market and the oil market, as well as the increasing dependence on foreign oil in China, it is worth focusing on the impact of global oil price fluctuations on China's automobile markets. This paper investigates the impact of different fluctuations in the global oil market on China's automobile market returns. First, the ARMA-EGARCH-ARJI model is applied to describe the characteristics of global oil fluctuations. Then, we use three specific models to discuss the impact of the expected and unexpected global oil price shocks and the global oil price jumps and explore whether there are corresponding price jumps in the automobile markets. We find that there are asymmetric effects of the influences of the expected and unexpected global oil shocks. Moreover, there is a lag effect of the global oil price jumps on the automobile markets. In addition, global oil price jumps lead to ‘U-shaped’ responses in the automobile markets. In contrast to the literature, we introduce factors of price jumps into the subject market and the global oil market, and we discuss the effects of different types of global oil price shocks in detail, especially those concerning the influence of oil price jumps.

How does economic policy uncertainty respond to the global oil price fluctuations? Evidence from BRICS countries

In this paper, we explore the effect of global crude oil price on the economic policy uncertainty (EPU) in BRICS countries. For this purpose, we have adopted the hybrid wavelet artificial neural network model (wavelet-ANN) and the threshold vector auto-regression model (TVAR) to decompose the global crude oil price series into different market participants' horizons and to examine its comprehensive and detailed impact on different underlying oil price change regimes. The empirical results are as follows: Firstly, we find that oil price has heterogeneous effects on EPU in different BRICS countries. In contrast, the EPU of oil importers among BRICS countries (China and India) significantly negatively affect global oil price in the long run. Secondly, in each country, the influence of oil price on EPU shows a nonlinear and asymmetric feature. For China, a significant effect exists in the high-fluctuation regime in the short run. Moreover, the significant negative response of Brazil's EPU to oil prices also occurred in the high-fluctuation regime. Regarding Russia, the significant negative effect occurs in the low-fluctuation regime. Similar results can also be found in India. In the long run, only in India, the fluctuation of global crude oil price has a significant positive impact on India's EPU.

How do dynamic jumps in global crude oil prices impact China's industrial sector?

Given that sharply rising external risks pose great challenges to the stable development of China's industrial sector, extreme risks to the global oil market deserve more attention. This study investigated dynamic jumps in global oil prices and their impacts on China's industrial sector at the aggregate and subsector levels. We applied the asymmetric ARMA-EGARCH-ARJI model to analyze the characteristics of global oil price fluctuations and introduced the jump component into the ARMA-EGARCH-X model to examine the impacts of dynamic jumps on China's industrial sector. We distinguished oil price jumps under different oil market conditions to assess the asymmetric effect of jump shocks. We found that global oil price fluctuations contain both volatility clustering with asymmetry and dynamic jumps. At the aggregate level, oil price jumps have negative shocks on China's industrial sector returns and positive spillovers on its volatility. The impacts show hysteresis and will be reversely adjusted afterward, which implies an overreaction of the industrial market to current oil price jumps. Moreover, jump shocks display an asymmetric effect under different global oil market conditions, which is embodied by the fact that they will reduce industrial sector returns more when the oil price decreases than when it increases. The five industrial subsectors respond differently to oil price jump shocks. Our findings deserve particular attention from both market participants and policy makers.

تحليل وقياس أثر الصدمات الإقتصادية على النمو الإقتصادي في العراق للمدة (2004-2018)

يهدف هذا البحث الى دراسة إلى تحديد أثر الصدمات الإقتصادية على النمو الإقتصادي في العراق خلال المدة (2004-2018)، وقد تم تحديد أهم العوامل التي تؤثر في النمو الإقتصادي، والمتمثلة في أسعار النفط، سعر الصرف، الديون الخارجية والإنفتاح التجاري ، وهي تمثل المتغيرات المستقلة للأنموذج المستخدم، بينما تم التعبير عن النمو الاقتصادي بالناتج المحلي الإجمالي بوصفه متغيراً تابعاً. وقد تم أستخدام طريقة المربعات الصغرى الإعتيادية في تقدير معلمات الأنموذج. كما تم الإستعانة بإختبار جذر الوحدة، وإختبار التكامل المشترك. وقد تم تقدير دوال إستجابة النبضة لتحديد أثر الصدمات الاقتصادية على الاقتصاد العراقي خلال مدة الدراسة. وقد تبين من نتائج التقدير أن السلسلة الزمنية للدراسة قد استقرت بعد أخذ الفروق الأولى، كذلك وجود تكامل مشترك، أي أن هناك علاقة توازنية طويلة الأجل بين المتغيرات المستخدمة، كما تبين أن أثر الصدمات الإقتصادية الناتجة عن تقلبات أسعار النفط العالمي كان واضحاً على النمو الإقتصادي في العراق.

The impact of oil price shocks on Tehran Stock Exchange returns: Application of the Markov switching vector autoregressive models

Global oil price fluctuations have a significant impact on various areas of the financial sector especially the stock market. This is evident in the oil-dominated Iranian economy. This study investigates the impact of world oil price shocks on the Tehran Stock Exchange using the Markov switching vector autoregressive (MS-VAR) model based on two regimes. Key variables for this study are world oil prices and the Tehran Stock Exchange Index. In addition, monthly time series data from 2002 to 2017 is used to estimate the MSIAH(2)-VAR(1) model and calculate the regime-dependent impulse response function of the impact of oil price shocks on the stock market under the different regimes. The findings show that the intercepts, coefficients, and variances of the model are different in both regimes and, based on the transition probability matrix, both the regimes are persistent. Thus, the shocks have both positive and negative impacts on the Tehran Stock Exchange in regimes one and two, respectively. This effect disappears earlier in regime two. Robustness tests employing daily data confirm the results of the monthly data. Nevertheless, regime-dependent analysis can provide a clearer understanding of Iran's economy to policymakers and investors.

Global Oil Price Shocks and Effects on Economic Growth: An Econometric Investigation of Nigeria

This study is necessitated for the reason that global oil price shocks are bound to affect the pace of economic growth in Nigeria. Given that Nigeria is a net oil-exporting country makes it particularly vulnerable to oil price fluctuations. The study made use of secondary data covering the period from 1990 to 2019. While the Augmented Dickey-Fuller unit root test was used for preliminary analysis; ordinary least square (OLS) regression analysis was used for short-run estimates. A combination of Johansen Co-integration test, Vector Auto Regression analysis, Granger causality test, Variance Decomposition, Impulse Response tests and the ARCH/ GARCH modelling techniques were used for long run estimation All the tests helped to confirm the integrity of our models. The findings of the study indicate that, in the short run, there was sufficient evidence to show that oil price changes have a significant effect on economic growth. For the long run test, the Trace statistics and Max Eigenvalue tests point to a case of non-integration. At a ten year horizon, 71.31% of the variance in economic growth is explained by shocks; while the balance of 28.69% was accounted for by the changes in the global price of crude oil. In other words, the growth of the Nigerian economy has to do with the economy itself and to some extent, fluctuations or instability associated with the global prices of oil shocks. The ARCH/GARCH analysis indicates that there exists a first-order ARCH effect and that the GARCH in mean term was also significant. Succinctly put, the above results suggest that though erratic, there is evidence of volatility clustering of oil price on economic growth in Nigeria. The study, therefore, recommends that Nigeria splay down on the continued dominance of primary production and export and low-value addition. There is a need for a paradigm shift. Nigeria’s economic growth should be driven by a diversified production structure, essentially driven by growth in manufacturing as it would increase job offer, raise productivity and incomes. Otherwise, the Nigerian economy will remain trepid, fragile and susceptible to shocks emanating from global oil price fluctuations. Poverty is likely to persist in Nigeria without a robust manufacturing sector where innovation and technology would improve value addition and raise productivity. Lastly, since an average economy is cyclical, whence the Nigerian economy can pull through the present economic recession occasioned by the Coronavirus pandemic, she must learn to save for the rainy day. Nigeria should draw lessons from history and from past mistakes in order to avert the vagaries associated with oil price volatilities and consequent budget alignment and re-alignments.

Attempts to Impact Global Oil Price Fluctuations

ABSTRACT The article describes the proposed method to determine global oil price. It suggest that to achieve this each country must set the value of its oil export, and use the collected data to calculate the weighted average value, which will be the global oil price.

Oil prices and inflation dynamics: Evidence from advanced and developing economies

We study the impact of fluctuations in global oil prices on domestic inflation using an unbalanced panel of 72 advanced and developing economies over the period from 1970 to 2015. We find that a 10% increase in global oil inflation increases, on average, domestic inflation by about 0.4 percentage points on impact, with the effect vanishing after two years and being similar between advanced and developing economies. We also find that the effect is asymmetric, with positive oil price shocks having a larger effect than negative ones. The impact of oil price shocks, however, has declined over time due in large part to a more credible monetary policy and less reliance on energy imports. We further examine the transmission channels of oil price shocks on domestic inflation during the recent decades, by making use of a monthly dataset from 2000 to 2015. The results suggest that the share of transport in the CPI basket and energy subsidies are the most robust factors in explaining cross-country variations in the effects of oil price shocks during the period.