Impact Of Oil Price Volatility Research Articles

Economic reforms and consumption trends: A deep dive into Saudi Arabia’s economic evolution

This study examines the aggregate consumption function of Saudi Arabia from 2000 to 2022, focusing on identifying key determinants of household consumption and evaluating the impacts of disposable income, household wealth, government expenditure, interest rates, and oil revenues. the research uses advanced econometric methods, including the autoregressive distributed lag (ARDL) model and Johansen cointegration test, to analyze the relationships among these variables. the findings reveal that disposable income, household wealth, and government expenditure significantly and positively influence consumption, whereas interest rates show a negative correlation. oil revenues also play a critical role, reflecting the country’s economic reliance on oil. the study highlights the necessity for economic diversification to reduce the impact of oil price volatility on household income and consumption stability. The results offer crucial insights for policymakers, emphasizing the need for strategies that enhance household income and wealth, maintain robust public sector spending, and effectively manage interest rates. these findings also support the importance of consistent and predictable income sources for sustaining consumption. additionally, this study suggests directions for future research, including developing sophisticated forecasting models to predict consumption trends and exploring other influencing factors such as demographic shifts and technological progress.

Impact of oil price volatility on economic growth in united states: an ordinary least square analysis

Impact of oil price volatility on economic growth in united states: an ordinary least square analysis

Analyzing Overnight Momentum Transmission: The Impact of Oil Price Volatility on Global Financial Markets

Fluctuations in oil prices substantially impact both the real economy and international financial markets. Despite extensive studies on oil market dynamics and overnight momentum, a comprehensive understanding of the link between oil price changes and energy market momentum, as well as their broader influence on global financial markets, remains elusive. This study delves into the intricate mechanics of overnight momentum transmission within financial markets, focusing on its origin in oil price fluctuations and its overarching impact on market dynamics. Employing the quantile VAR method, we analyze daily market data from 3 January 2014 to 17 January 2024. This study emphasizes the significance of overnight momentum on the transmission of volatility, particularly in the tails of the distribution, and highlights the necessity for efficient strategies to govern financial stability. The shale oil revolution, COVID-19, the Russia–Ukraine war, and the Israel–Hamas conflict have significantly impacted the interconnectivity of financial markets on a global scale. It is crucial for policymakers to give priority to the monitoring of the energy market to reduce risks and improve the resilience of the system.

Impact of oil price volatility and economic policy uncertainty on business investment - Insights from the energy sector

This research employs a worldwide sample of 4017 energy sector companies from 1996 to 2022 to examine the effects of economic policy uncertainty (EPU) and oil price uncertainty (OPU) on corporate investment in oil/energy sector and this study analyze how market instability and international economic disasters shape the connection between OPU and business assets. GLM regression with firms-years fixed effects and firm-based clustering indicate that both OPU and EPU had a detrimental influence on corporate investment in energy sector. Generalized linear models provide a universal method for addressing various response modeling issues. It is also revealed that oil-producing nations experience OPU and EPU's negative effects more severely than oil-consuming nations. This paper also demonstrates that the link between corporate investment, OPU and EPU is influenced by nations that produce oil, market volatility, and global financial crises. Strong evidence was found supporting the notion that OPU and EPU had a statistically significant detrimental impact on business assets. The findings of the paper are consistent under a variety of robustness tests and show that the association between OPU and EPU and business assets still holds. The results have significant bearing on the asset strategies that company managers and governments should adopt in light of the volatility of oil prices and EPU and this study provide valuable insights for policymakers who are focused on achieving energy transition, enhancing energy security, and meeting environmental goals such as reducing greenhouse gas emissions.

Impact of crude oil price volatility on Indian stock market returns: A quantile regression approach

This paper examines the heterogenous effect of oil price volatility on Indian sectoral stock returns for the period January 2011 to September 2022 using the quantile regression method, which helps us to analyse the impact in bearish, normal, and bullish periods. The results show that total and sectoral stock returns are negatively affected by oil price fluctuations and the negative effect is stronger during the bearish period. In the normal and bullish periods, oil price volatility does not affect stock returns greatly. The interest rate and exchange rate changes have a stronger effect on sectoral returns in the bearish period in the pharmaceutical, healthcare, banking and finance, IT, fast-moving consumer goods (FMCG), and consumer durables sectors. The study shows that the impact of oil price volatility on sectoral returns is less than the impact of interest rate and exchange rate changes. The study also shows that oil price volatility directly impacts market portfolio returns initially, which subsequently spills over to sectoral returns, which implies that sectoral returns are impacted by oil price volatility through an indirect channel.

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.

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.

Commodity Market Risk as a Determinant of Corporate Capital Structure

The article addresses the problem of managing the capital structure of enterprises in the conditions of commodity market risk. The problem of capital structure determinants is well documented, but the impact of oil price volatility still remains a research gap. The article also sheds new light on the problem of capital structure management in a turbulently changing economic environment. The research goal was to determine the importance of the volatility of crude oil prices as a determinant of capital structure. The analysis was based on the group of companies which represent the oil industry.

IMPACT OF OIL PRICE VOLATILITY AND TRADE OPENNESS ON A GROWING ECONOMY

This study investigates the interplay between oil price volatility, economic growth, and openness using data spanning from 1980 to 2020. Bound cointegration and regression methods were employed to analyze both short and long-term effects. The results indicate that in the short run, oil price volatility negatively impacts economic growth. However, as the economy becomes more resilient over time, oil price volatility begins to have a positive effect on economic growth in the long run. Additionally, trade openness is found to have a positive and significant impact on economic growth in the short term. Nevertheless, the influence of trade openness and exchange rates on long-term economic growth is statistically weaker. This suggests that the adverse impact of oil price volatility is more pronounced in the short run and diminishes over the long term. Consequently, policymakers should focus on managing exchange rates and leveraging comparative trade advantages to promote economic growth.

Assessing the Impact of Oil Price Volatility on Food Prices in Saudi Arabia: Insights From Nonlinear Autoregressive Distributed Lags (NARDL) Analysis

Abstract This research investigates the impact of oil price fluctuations on food prices in Saudi Arabia between 1979 and 2020 using Nonlinear Autoregressive Distributed Lags (NARDL) methodology. The study employs Augmented Dickey Fuller (ADF) and Phillips Perron (PP) tests to determine the integration order of the variables and Bounds testing to confirm the existence of long run cointegration relationships between each variable. The results indicate that oil shocks influence food prices through several mechanisms. Firstly, the cost of energy increases due to the rise in oil prices, affecting the agricultural commodity market, including farm equipment, food processing, packaging, and distribution costs. Secondly, the demand for agricultural commodities to produce biofuels affects food availability and thus food prices. Thirdly, as an oil-based economy, the oil price shock affects food prices through its impact on government spending, which affects aggregate demand and liquidity. Therefore, Saudi Arabia should adopt appropriate policies to mitigate the impact of oil price shocks on food prices, including investing in renewable energy sources, diversifying its economy, and improving food production and supply chain efficiency. Additionally, implementing appropriate fiscal policies to ensure sufficient budget allocation for food support programs is crucial. However, Investing in groundwater exploration can contribute significantly to the development of Saudi agriculture and to gradually achieving food self-sufficiency.

Oil Price Volatility and Business Profitability: Evidence from The Local Market

This study seeks to investigate the impact of oil price volatility on business profitability in the Province of Guimaras. Through a mixed-methods approach, the study aims to answer important research questions such as the correlation between crude oil price changes and micro business profitability and investment, potential differences in the effect of crude oil prices during periods of high and low prices, trends in the profitability of micro businesses entrepreneurs, the role of the oil and gas upstream segment and its prospects for the future, and proposes an extension program toolkit to help micro business entrepreneurs mitigate the impact of oil price fluctuations on their businesses. The study will collect and analyze data from 200 micro business entrepreneurs operating in five municipalities within the Province of Guimaras, which represent approximately 90 percent of micro businesses in the area by population. By providing significant insights into the impact of oil price volatility on small businesses, the findings of this study can help inform policymakers and business owners to improve economic sustainability and competitiveness in the local market. The researchers recommend several strategies to help small businesses better manage the risks associated with oil price volatility. These include diversifying business operations and revenue streams, developing proactive risk management strategies, seeking financial support and education, and advocating for policies that promote energy efficiency or diversify energy sources. The researchers hope that these recommendations will help small businesses maintain profitability in the face of changing market conditions.

Oil Price Volatility and Federal Government Recurrent Expenditure in Nigeria: Mediating Role of Exchange Rate

An empirical examination of the impact of oil price volatility on federal government recurrent expenditure in Nigeria and the mediating role of exchange rate from 1980 to 2022 was carried out in this study. The Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model was used in the data analysis. The findings reveal compelling evidence that oil price volatility as measured using the Brent oil volatility has a significant effect on recurrent federal government spending patterns. The analysis also shows that exchange rate variations serve as significant control variable that influence oil price fluctuations and federal government recurrent expenditure. Hence, the study recommends that federal government should create and properly administer a stabilization fund to save excess oil revenue during periods of boom to lessen the immediate effects of oil price volatility and the abrupt impact on budgetary allocations on recurrent expenditure. There is also the need to have a deep-cut on unproductive recurrent expenditures by federal government and its appointees. The study further recommends the adoption of a closely monitored exchange rate policy by government.

The macroeconomic impact of oil price volatility and import volumes

Nowadays, oil is not only a necessary energy for industrial development but also an important strategic resource for the international economy. Previously, many factors led to a sharp rise in international crude oil prices. Therefore, it is of great significance to explore the influence mechanism between oil price fluctuation and the macroeconomy. In this paper, the VAR model is used to quantitatively analyze the dynamic relationship between oil price, China’s GDP, China’s CPI and oil import volume, and the orthogonal impulse response analysis and Granger causality test are carried out.The results show that China’s crude oil import volume is the granger factor of GDP, that is, the early changes in China’s crude oil import can effectively explain the changes in China’s GDP. China’s CPI and GDP show a short-term inverse response, and the change in the data is more dependent on the data of the previous quarter. Given the above problems, this paper proposes that China should attach importance to the long-term stability of oil exploitation, reserves, and oil market, and maintain the stability of the oil trade market by adjusting macroeconomic and gasoline prices when necessary.

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 Oil Price Volatility on Inflation and Economic Growth in Tanzania

The Impact of Oil Price Volatility on Inflation and Economic Growth in Tanzania

Symmetric and asymmetric GARCH estimations of the impact of oil price uncertainty on output growth: evidence from the G7.

Crude oil is an essential source of energy. Without access to energy, output growth is impossible. As a result of this link, volatility in oil prices has the ability to induce fluctuations in the output of both developed and developing economies. Moreover, factors such as business cycles and policy changes often introduce nonlinearity into the transmission mechanism of oil price shocks. This study therefore examines not only the interconnectedness of oil price volatility and output growth, but also the nonlinear, asymmetric impact of oil price volatility on output growth in the countries making up the Group of Seven. To this end, monthly data on West Texas Intermediate oil price and industrial production indices of the Group of Seven countries over the period 1990:01 to 2019:08 is used for empirical analysis. The study employs the DCC and cDCC-GARCH techniques for symmetric empirical analysis. The asymmetric empirical analysis is also conducted via GJR-GARCH, FIEGARCH, HYGARCH and cDCC-GARCH techniques. The findings reveal disparities in the magnitudes of the positive and negative (asymmetric) effects of oil price shocks on output growth. The results also reveal that past news and lagged volatility have a significant impact on the current conditional volatility of the output growth of the Group of Seven countries. The study concludes that the impact of oil price volatility on output growth in the selected economies is asymmetric, the volatility is highly persistent and clustered, and the asymmetric GARCH models outperform the symmetric GARCH models.

The impact of oil price volatility on the economic development: The linear programming method study

In this study, the utilization of the linear programming method for the purpose of optimizing the impact of oil price volatility on economic development has been conducted accordingly. It utilised linear programming to ascertain how changes in oil prices have impacted the economy. Using the data gathered, the linear programming method has been demonstrated. Quality benchmarks for a number of characteristics have been calculated using the optimization of linear programming (Jarrett et al., 2019; Mo et al., 2019). The results of the linear programming, an examination of convergence was conducted. The four most important parameters have had growth regressions computed for the period 2010–2020 that factor in monetary development. These regression analyses have already been completed. Further, the well-developed static model exhibits linear effects within a finance-growth foundation. The findings have optimized CALP and financial growth accordingly. The proposed model was tested by running a cost-benefit analysis on a subset of the crude oil’s qualitative characteristics. The model presented in this article considers not only consumer satisfaction with product prices but also producer satisfaction with those same prices.

AN INTERPLAY OF OIL PRICE VOLATILITY, EXCHANGE RATE AND STOCK RETURNS IN NIGERIA

We analyze the interplay of oil price volatility, exchange rate and stock market return in Nigeria using 5-days daily data covering 1985 to 2021. The variables used in the study are oil price and exchange rate volatilities as the independent variables, and stock market return as the dependent variable. The data for the study was obtained from the CBN statistical database; We employed descriptive statistics and VECH GARCH (1,1) model in our estimation. The result of the analysis shows that both the exchange rate and oil price volatility positively and significantly influence the shocks to stock market return in Nigeria. In conclusion, we observed that shocks to stock market return are attributed to oil price volatility and exchange rate volatility. we advocate for the diversification of the Nigerian economy to reduce the impact of oil price volatility on stock market return.

The influence of oil price uncertainty on corporate debt risk: Evidence from China

The uncertainty of international oil price has significant impacts on the macroeconomy and on firm-level business activities. It may affect the corporate economic activity through several channels and transmission mechanisms. This paper investigated the relationship between oil price uncertainty and corporate debt risk using the micro panel data of non-financially listed enterprises in China from 2010 to 2018. The results showed that an increase in oil price volatility deepens corporate debt risks, and the mediating and moderating effects demonstrated that oil price volatility indirectly worsens corporate debt risks through channel variables such as debt maturity, weakened solvency, and deepening zombification degree. Further analysis of the results indicated that the impact of oil price volatility on corporate debt risk is remarkably heterogeneous among different enterprises and is more serious in enterprises with lower financing constraints, in non-state-owned enterprises, and in energy-intensive enterprises.

The oil price uncertainty effect on stock returns of the Indian renewable energy firms under different market conditions

AbstractThis study investigates the oil price uncertainty effect on stock return of the Indian renewable energy firms under different market conditions. We use the Oil Volatility Index (OVX) as a proxy of oil price uncertainty. All renewable energy companies listed on the National Stock Exchange of India are considered. Monthly data are analysed from January 2009 to December 2019 using panel quantile regression. In the whole sample of the renewable energy firms, we find that the impact of oil price volatility on stock return is negative only in extreme market conditions. In subgroups of renewable energy firms, oil price volatility has negative coefficients in most quantiles. The oil price volatility change is decomposed into positive and negative changes to investigate the asymmetric effect. In subgroups of renewable energy firms' analysis, most of the asymmetric effects of oil price volatility are seen in the bearish market condition. The policymakers can use the findings to formulate policies as per the oil price volatility movement to ensure the growth of the renewable energy sector. Investors and portfolio managers can make appropriate strategies based on oil price volatility to maximise the investment return across market conditions.