Impact Of Crude Oil Price Research Articles

Asymmetric relationship between crude oil price and remittance inflows in a small island economy: Evidence from non-linear ARDL approach

Sri Lanka's economy heavily depends on remittance inflows to finance its import of essential and intermediate goods. A decline in remittances could severely limit the country's import capacity, affecting overall economic growth and development. This study investigates the impact of crude oil prices on Sri Lankan remittance inflows from 1980 to 2020, while accounting for per capita GDP, financial development, and exchange rates as additional explanatory variables. Employing a nonlinear autoregressive distributed lag (NARDL) model, the analysis reveals significant asymmetric effects of oil price shocks on remittance inflows. In the short run, positive oil price shocks lead to increased remittance inflows, whereas negative shocks reduce them. However, in the long run, both positive and negative oil price shocks have an adverse impact on remittance inflows. Furthermore, changes in per capita GDP, financial development, and exchange rates also play a crucial role in influencing remittance inflows. The findings highlight Sri Lanka's vulnerability to global oil market fluctuations and suggest policy measures to mitigate these risks. Key recommendations include diversifying labor export markets, enhancing financial infrastructure, and reducing dependence on remittance inflows to sustain import capacity and promote long-term economic resilience.

The Impact of Crude Oil Price Shock: Evidence from Bangladesh

This study aims to estimate the impact of crude oil price on the DSEX broad index of the Dhaka stock exchange using the Vector Error Correction Model (VECM) for the study period 2013:01-2022:12. It has decomposed the oil price shock into supply side and demand side oil shock. The empirical result shows that the stock price decreases significantly with crude oil prices driven by the shock in oil production. In contrast, the improvement in global economic activity results in a shock in the oil price which has a significant positive impact on the stock price. Furthermore, the accumulated shock in oil prices has a significant positive impact on stock prices. The variance decomposition under the VEC model shows that the demand shock of oil price contributes more to the variation in stock price for the oil-importing country Bangladesh. Since different oil price shocks have different impacts, the policy maker and investors implement decisions based on the understating of the sources of the shocks.

Echoes of Conflict: Unveiling the Interconnected Tapestry of Russia-Ukraine Warfare, Oil Price Ballet, and the Asian Stock Symphony

The purpose of this research is to look into the impact of the Russia-Ukraine war on the relationship between oil prices and the Asian stock market. While earlier studies have investigated the impact of oil prices on stock markets, there has been little research into the impact of crude oil prices on the Asian stock market in the context of the Russia-Ukraine war. For this purpose, the data is collected from NSE and Bloomberg database the study's findings imply that the Russia-Ukraine war has had a major impact on the relationship between crude oil prices and stock market indices in numerous Asia-Pacific countries. The study suffers from a few limitations such as it only examines the relationship between crude oil prices and stock market indices but there are other macroeconomic factors, such as interest rates, inflation, and political instability which also affect the market.

Energy Prices and Their Impact on US Stock Indices: A Wavelet- based Quantile-on-Quantile Regression Approach

This study delves into the effects of crude oil and gas prices on the United States’ (US) conventional, Islamic, and environmental, social, and governance (ESG) stock indices from January 2013 to December 2022. Decomposing original time series data to minimise inherent fluctuations and using the Quantile-on-Quantile (QQ) regression approach presents a nuanced view of how these energy prices impact different stock indices. The findings reveal that crude oil prices have a variable impact on the indices: high prices negatively influence the indices, low prices have a positive effect, and moderate prices yield a moderate positive impact. After data decomposition, this positive influence diminishes in higher quantiles, indicating an emerging neutral effect in stabilised conditions. In contrast, gas prices show a limited impact, with high prices slightly benefiting conventional and ESG indices but less so for the Islamic index. This suggests a more pronounced influence of oil prices on the indices, likely due to the dependence of many listed companies on oil. The study emphasises the importance of considering oil-related risks in investment strategies and highlights the asymmetric impact of crude oil prices on the US stock indices. These findings have significant implications for investors and policymakers. They underscore the need for careful consideration of oil price dynamics in investment decisions and the importance of staying vigilant against shifts in oil prices that could lead to market instability.

Unveiling the enigma: Exploring how uncertain crude oil prices shape investment expenditure and efficiency in Chinese enterprises

As a crucial energy resource, crude oil plays a vital role in propelling global economic progress. China's energy consumption is extensive due to its position as the second-largest global economy and leading importer of crude oil. A stable crude oil supply can support China's steady economic growth. The China Crude Oil Futures (INE) launch in 2018 has enriched the WTI and Brent crude oil market systems, further consolidating the critical position of crude oil in China's economic and financial development. Therefore, this paper first examines the impact of crude oil price uncertainty on the investment activities of Chinese micro-enterprises by selecting three crude oil futures: WTI, Brent, and INE. Based on the quarterly (half-year) report of Shanghai and Shenzhen A-share listed enterprises from 2008 to 2023, this study examines the effects of uncertainty in crude oil prices on investment spending and efficiency inside enterprises and the underlying mechanisms that drive these effects. This study provides evidence that the fluctuation in crude oil prices has a detrimental impact on investment expenditure, while concurrently improving the investment efficiency of enterprises. The mechanism test also demonstrates that the volatility of crude oil prices has the potential to diminish investment expenditure and enhance the investment efficiency of enterprises. On the macro level, it mainly depends on reducing the macroeconomic boom index, enterprise boom index, and entrepreneur confidence index. At the micro level, it relies on increasing enterprise cash flow, lowering enterprise investment expectations and consumer product demand. Further heterogeneous analysis indicates that during significant events such as the global COVID-19 pandemic and the Russia-Ukraine conflict, there is a substantial increase in crude oil price uncertainty, leading to reduced enterprise investment expenditure and improved enterprise investment efficiency. Furthermore, the volatility associated with the increase in oil prices has a more pronounced effect on investment outlays and operational effectiveness. Moreover, the volatility of crude oil prices significantly influences the investment expenditure and investment efficiency of enterprises in the secondary industry and non-state-owned sectors. This empirical study examined the causal relationship between crude oil price, investment spending, and investment efficiency. The results of this investigation enhance the current scholarly knowledge on the relationship between crude oil prices and investment, so contributing to the advancement and refinement of this particular field of inquiry. This paper makes a valuable exploration and attempt to explain the mechanism of the impact of crude oil price on the investment activities of micro-enterprises.

Examining the Role of Inflation Moderation in Mitigating the Impact of Crude Oil Prices on Indonesia's Sharia Stock Market

This study investigates the impact of crude oil prices on Indonesia's Sharia stock market, considering inflation as a moderating variable to address existing debates in prior research. Utilizing data from June 2011 to December 2021, including the Indonesian Sharia Stock Index (ISSI), World Texas Intermediate (WTI), and inflation, the study employs Moderated Regression Analysis (MRA) to uncover significant positive correlations between crude oil prices and the Sharia stock market. The findings highlight the moderating role of inflation, indicating that the market weakens when crude oil prices rise alongside inflation and strengthens in the absence of inflationary pressures. Practical implications suggest portfolio diversification for investors to manage associated risks. The study contributes theoretically by introducing additional moderator variables and offers empirical insights, yet acknowledges limitations, advocating for further research to deepen the understanding of the complex relationship between crude oil prices, inflation, and the Sharia Stock Market in Indonesia.

The significance of world oil prices and macroeconomic factors for the global competitiveness of countries

There has been a transition to renewable energy sources and the abandonment of fossil sources worldwide. Although many researchers have studied the influence of various factors on the competitiveness of selected national economies, there is little research on the impact of resource prices. Based on World Economic Forum (WEF) data, this study examined the impact of crude oil prices and macroeconomic indicators on oil exporting and importing countries' global competitiveness index (GCI). Using the generalized method of moments (GMM) to analyze panel data for 103 countries from 2006 to 2019, we found that rising oil prices increase countries' global competitiveness. Moreover, we assessed the impact of oil prices on GCI sub-indices. These effects are stronger for oil-importing countries than for oil-exporting countries. GDP growth, total factor productivity, average labor productivity, unemployment, and fixed broadband subscriptions, on average, had the most significant impact on countries' global competitiveness. The results draw attention to the most effective support areas for countries in the world's competitiveness ranking in the transition to renewable energy sources. In the medium and long term, oil exporting countries should use oil revenues mainly for innovative development and accumulation of human capital to improve positions in the WEF ranking.

Petrol Fiyatlarının Ulaştırma Sektörü Hisse Senedi Getirilerine Etkisi: Türkiye Hisse Senedi Piyasası Örneği

This study examines the impact of crude oil prices on transportation sector stock returns of Turkey. ARDL Bound Test approach is utilized to investigate both long-run and short-run impacts. Research findings show that crude oil prices have an adverse impact on stock returns in short-run since oil is a crucial input for transportation firms. However, in long-run, increasing oil prices enhance stock returns in the sector. This result can be explained by the oligopolistic market structure of the industry. This study also investigated the impact of other factors on stock returns such as macroeconomic activity, aggregate stock market performance, and global economic policy uncertainty. The results imply that transportation sector returns are also highly sensitive to macroeconomic and aggregate stock market performances. Besides its academic contribution to the literature, the findings of this research offer precious practical implications for financial investors, industry stakeholders, and policymakers as well.

Study of the impact of crude oil prices on economic output and inflation in Saudi Arabia

Our work analyses the effects of oil price changes on economic output and inflation in Saudi Arabia by employing both linear and nonlinear autoregressive distributed lag models over the period 1980–2021. The results report that crude oil price changes have only asymmetric impacts on economic output in Saudi Arabia. The increases in crude oil price result in higher output growth in the long run whereas their decreases do not have impact on output growth in both the short and long run. Crude oil price variations (increases or decreases) have symmetric impacts on inflation in both the short and long run in Saudi Arabia. The rises in crude oil prices induce higher inflation whereas their decreases lead to lower inflation in both the short and long run. Appreciation of Saudi currency can lead to higher inflation only in the short run. Thus, Saudi authorities should accompany the changes in oil prices by some policies to combat inflationary pressures and their consequences.

The Impact of International Relations Patterns on China’s Energy Security Supply, Demand, and Sustainable Development: An Exploration of Oil Demand and Sustainability Goals

This study explores the impact of international relations on China’s energy security and supply/demand dynamics, specifically focusing on new energy sources and technological advancements. Given China’s status as the world’s largest energy consumer, achieving a balance between energy supply, demand, and sustainable development is crucial. This study quantifies the influence of international relations on the energy market, particularly the uncertainties arising from geopolitical events and international tensions that affect energy supply and prices. The research findings indicate that, in a long-term cointegrated relationship, a 1% change in the geo-political risk (GPR) index leads to a 0.229% change in China’s crude oil imports. Additionally, the impact of China’s GDP growth, carbon emissions, and sustainable energy consumption is −2.176, 0.723, and 0.167, respectively. This study also discusses the reasons behind the differential impact of crude oil prices on the United States and China. Recognizing the interplay between China’s energy security and international relations is vital for effective policy formulation. This study provides valuable insights for policymakers and stakeholders to ensure a sustainable and secure energy future.

The dynamic linkages among crude oil price, climate change and carbon price in China

Crude oil prices, weather changes, and carbon prices are closely related, but little research investigates their dynamic relationship. Studying how crude oil prices and weather changes dynamically affect carbon prices is significant to investors and producers. Taking carbon prices in Hubei and Guangdong as examples, we use the time-varying parameter vector autoregressive (TVP-VAR) model to investigate the time-varying influence of WTI and weather changes (average temperature, sunshine duration, and precipitation) on China's carbon prices. Our empirical results show that: firstly, the impact of crude oil prices and weather changes on carbon prices is obviously time-varying and lagging. Secondly, the short-term impact of crude oil prices and weather changes on carbon prices is higher than the long-term impact. And crude oil price mainly positively affects carbon prices in the short term. Finally, due to the differences in industrial development and weather conditions between Hubei and Guangdong, there are certain regional differences in the impact of crude oil prices and weather changes on carbon prices. Based on these research results, some suggestions are provided for global sustainable development and green transformation of enterprises.

Impact of Russia-Ukraine War on Sustainable Development Goals: A Study through Indian Financial Market Perspective

This study measures impact of geopolitical crisis concerning Russia Ukraine War with reference to Sustainable development Goal 8. The researchers have analyzed the variables such as Indian stock market performance, MCX crude oil and Indian GDP Indices to calculate the linear interdependencies among crude oil, Indian stock market performance and Gross Domestic Product using monthly data from January 2016 to May 2022 using a Vector Autoregressive (VAR) model. Time series stationarity is checked using Augmented Dickey-Fuller test. The time series used for the analysis are MCX iCOMDEX crude oil Index, Nifty 50 Index, and GDP Index. Correlation is measured using the Granger Causality Test and VAR model. The outcome demonstrates that the lagged values of the Nifty and crude oil prices indexes are very effectively used to explain the GDP Index. Granger’s Causation Matrix shows that past value of NIFTY Index causes change in GDP Index similarly past value of Nifty Index causes change in MCX Crude oil Index, whereas MCX crude oil does not cause much change in GDP Index. Further research could be done using a detailed time series for a longer period to find any impact of crude oil prices on GDP.

The Impact of Macroeconomic Factors on the US Stock Exchange

The aim of the present study was to analyze the impact of crude oil prices, the US treasury 10-year bond yield rate, and gold prices on S&P 500 stock prices using daily data of the period from 04/01/2010 to 19/11/2022. For that purpose, this study employed the ARDL method. According to the results of the ARDL method, there was no statistically significant relationship between S&P 500 stock prices and gold prices, oil prices, and US treasury 10-year bond yield rates in the long term. However, while the impact of US treasury 10-year bond yield rates and gold prices was positive in the long term, the impact of oil prices on US stock prices was negative. In the short term, the impact of oil and gold prices on stock prices was statistically significant. Consequently, study of the short-term coefficients revealed a positive relationship between US stock prices and gold and oil prices. As a result, gold and oil prices had a positive impact on US stock prices in the short term.

Does Oil Price Affect the Economic Growth in Somalia Asymmetrically?

Crude oil is one of the most important inputs for production activities, and an increase in its price has a crucial effect on economic growth both in developing and developed countries and Somalia is not an exception. To this end, this undertaking models the asymmetric impact of crude oil price on economic growth in Somalia using the nonlinear Autoregressive Distributed Lag (NARDL) model with annual time series data stretching from 1990 to 2018. The empirical results of the study revealed that oil price asymmetrically affects economic growth in Somalia both in the short and long runs. A positive oil price shock is inconsequential in the long run but impedes economic growth in the short run, while a negative oil price shock has a constructive role in stimulating economic growth in the long run but not in the short run. Nevertheless, the study suggests the implementation of economic diversification towards utilizing other types of energy other than oil and designing policies aimed at increasing energy investments.

The Russia-Ukraine Conflict, Fluctuation of Crude Oil Price and Dynamics of China's stock market

The price of crude oil soared after the outbreak of the Russia-Ukraine conflict. However, China's stock market, by contrast, continues to fall. This paper studies the impact of crude oil price on the dynamic of China’s stock market. We build an ARMAX model and an ARMA-GARCH model to analyze whether there are connections between crude oil price and China’s stock market. This paper finds that the crude oil futures rate of return is positively correlated with the Shenzhen Component index rate of return and Shanghai Component index rate of return. Also, the crude oil price has a significant impact on the fluctuation of the Shenzhen and Shanghai Stock Exchanges.

Oil-growth nexus in Nigeria: An ADL-MIDAS approach

In this study, we investigate the effect of oil price on the real GDP growth of Nigeria. We contribute to the extant literature on oil price-growth nexus in three ways. First, we employ one of the recently developed Mixed Data Sampling models owing to its ability to accommodate both high and low data frequencies in the same predictive model. Second, we examine the impact of crude oil price on aggregate as well as sectoral output growth, with focus on agriculture, industry and service sectors. Third, we account for the role of macroeconomic/control variables and crude oil price asymmetry. Our results show that accounting for crude oil price asymmetry and macroeconomic determinants increases the predictability of the ADL-MIDAS model for the oil price-growth nexus. On the aggregate, we find that negative oil price changes significantly reduce economic growth while positive oil price changes do not increase economic growth significantly. The sectoral analyses show that the service and industry sectors are more affected by the negative oil price changes than the agriculture sector. Overall, we conclude that the impact of government participation in the economy remains huge and the situation whereby recurrent to capital expenditure ratio of government is about 80/20 percent dampens the growth potential of the Nigerian economy. More investment in capital infrastructure relative to recurrent expenditure is recommended, to reduce the adverse effect of negative crude oil price on economic growth in Nigeria.

The Impact of Oil Price Fluctuations on Consumption, Output, and Investment in China’s Industrial Sectors

This paper aims to simulate and evaluate the impacts of increases and decreases in oil price on industrial sectors in China. We develop an oil-economy computable general equilibrium (OE-CGE) model with crude oil as an important factor in production. The transmission mechanism of crude oil price swings to various industrial sectors is described in the model. We calibrate parameters in the model parameters using input-output data. In addition, we simulate the rise and fall of oil prices in the model and assess the impact of crude oil prices on various industrial sectors. The results show that crude oil price changes have the greatest impact on the output and consumption of crude oil and gas extraction products sector, crude oil refined coke products, and processed nuclear fuel products sector. The investment of public utilities sector is the most sensitive to changes in crude oil price. When the price of crude oil changes, its investment drops significantly. Crude oil price stability is extremely important for investment and output stability in all sectors.

EDUCATIONAL FACTORS AS DETERMINANT OF INTERNATIONAL RESERVES ACCUMULATION IN ORGANISATION OF PETROLEUM EXPORTING COUNTRIES

Despite huge petroleum revenues with high development needs, the growth of international reserves in OPEC countries has been negligible. This study examined the impact of educational factors using different levels of literacy in stimulating the macroeconomic determinants of international reserves in OPEC member countries using data from 2008 to 2018 from World Bank Development Indicators for 15 member countries. The study used a dynamic panel model, and the data were analyzed using System of Generalized Method of Moments (SGMM). The results show that educational levels such as adult literacy, youth literacy, tertiary and secondary enrollment mitigate the negative impact of the exchange rate and stimulate the impact of crude oil prices, while tertiary enrollment stimulates the impact of foreign direct investment and reduces the negative impact of economic crises. Overall, youth literacy was most significant for these economies, while economic crises were significantly positive at all levels as a major determinant of international reserve accumulation. Therefore, it was concluded that education contributes to the economy's accumulation of more reserves. In particular, the study recommended that national governments provide adequate funding for the education sector to improve the quality of education at the junior and high school levels in order to provide adequate knowledge and skills to enhance foreign investment.

The impact of crude oil prices on Chinese stock markets and selected sectors: evidence from the VAR-DCC-GARCH model.

The interaction between oil and stock market returns is one of the most important relationships that have a significant influence on the economy of any country all over the world. Therefore, this paper investigates the impact of crude oil prices on the Chinese stock market and selected industries by using the VAR-DCC-GARCH model over the period from December 26, 2001, to April 30, 2019. The empirical results show that the impact of Brent crude oil prices on the Shanghai Composite Index and selected industries is significant. However, there are some variations in these relationships and the degree of influence on each differs during different sample periods. Brent crude oil prices exert substantial influence on some specific industries, like mining, chemical, nonferrous metals, and steel. Whereas, the volatility spillover effect of Brent crude oil prices is stronger within the mining, chemical, steel, nonferrous metal, building materials, building decoration, electrical equipment, electrical equipment, textile and garment, light manufacturing, public utility, and transportation industries than within other industries. When oil prices change abruptly, the risk of spillover impacts of oil prices on stock markets will also increase. In conclusion, the impact of Brent crude oil prices on the Chinese stock market is generally positive. Furthermore, the subsequent volatility of Chinese stock market prices will, in turn, influence the volatility spillover of Brent crude oil prices on the indexes. The result is an ongoing back and forth of changes in price volatilities.

The impact of crude oil price on food prices in Iraq

AbstractAlthough substantial academic literature has attributed the increase in food prices to the role of crude oil price change, this unique connection has not experienced enough attention in net food‐importing and oil‐exporting developing countries. This research investigates the impact of oil price fluctuations on food prices in Iraq between 2001 and 2020 using time‐series econometric methods. Nevertheless, the oil price is a variable of interest, inflation is also added in the estimated models as a relevant extra determinant of food prices. The Johansen test and the autoregressive distributed lag bound test are used to evaluate the existence of cointegration between crude oil price and food prices. Results from the empirical analysis provided evidence indicating that a long‐run relationship between crude oil price and food prices exists in Iraq. Moreover, the outcomes from the forecast error variance decompositions suggested the existence of a monodirectional dynamic linkage between crude oil price and food prices. The empirical results from impulse response functions indicated a positive response for food prices due to one standard deviation shock in oil price. The study recommends short‐term and long‐term agricultural policies for Iraq to separate its dependency from international food markets that are affected by oil price shocks.