Future Oil Research Articles

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.

EVALUATION OF THE HYDROLOGICAL RESPONSE TO CLIMATE AND LAND USE CHANGE IN A WATERSHED

Climate change and land-use change influence hydrological processes in a basin, thereby affecting water production. The Cañar River basin originates in the Andean moors and flows into the Pacific Ocean, covering areas of great importance for conservation and agriculture. The basin exhibits a high degree of climatic and ecosystem variability. Two scenarios were proposed and studied using a semi-distributed hydrological model: a) a future climate scenario based on the projection of historical precipitation and temperature trends observed from 1985 to 2010 at 9 stations distributed throughout the basin, and b) a future soil use scenario derived from a multi-temporal analysis of land use, explanatory variables, and transition models. The analysis revealed an increase in precipitation during the rainy season and a decrease in precipitation during the dry season, resulting in a slight reduction in annual precipitation. During the study period, an increase in temperatures is observed in the low and high zones, while in the middle zone, there is a slight reduction in temperatures. The most significant land use changes were observed in natural vegetation, which experienced a significant reduction in area. If the observed climatic trends persist, precipitation would be expected to be concentrated mainly in the rainy season, leading to increased water availability during that period and a significant decrease during the dry season.

Evaluating Oil Price Forecasts: A Meta-analysis

Oil price forecasts have traditionally attracted the interest of both the empirical literature and policy makers, although research efforts have been intensified in the last 15 years. The present study investigates the forecasting characteristics that have the greatest impact on the accuracy level of such forecasts. To achieve this, we employ a meta-analysis approach of more than 6,000 observations of relative root mean squared errors (RRMSEs) which are pooled within a Bayesian Model Averaging (BMA) method. The findings indicate that forecasting frameworks such as MIDAS and combined forecasts tend to report significantly lower forecast errors. In addition, the choice of the oil price benchmark is an important factor, with the Brent price to offer lower forecast errors. Furthermore, the short-run horizons tend to produce more accurate forecasts and the same holds for the real, instead of the nominal oil prices. A number of robustness tests confirms the validity of these results. Overall, the findings of this study serve as a guide for future oil price forecasting exercises.

A European stakeholder survey on soil science skills for sustainable agriculture

AbstractThe European Union's soil strategy for 2030 has set the objective of achieving ‘healthy soils’ in Europe by 2050. To achieve this ambitious goal, dedicated soil science skills will be needed in the future. This article presents the results of a survey on soil science skills for the future conducted within the framework of the European Joint Program—EJP SOIL. The survey was distributed online in the 24 countries participating in the EJP SOIL. The skills were expressed as having knowledge in particular topics related to soils, practical know‐hows or abilities or outcomes of knowledge and know‐hows put into action. No significant differences in the importance of soil‐science related skills were found between countries or stakeholder categories. The two groups of skills that ranked at the top of stakeholders' concern were ‘Having a scientific basis of knowledge on soils and their functioning’ and ‘Knowing how to mobilise agronomic drivers to manage and protect soils’. This means that there is a need for people with an in‐depth knowledge in soil science, but also soil scientists with integrated knowledge in agronomy and crop production. Three important findings relate to the knowledge of soil science itself: (i) there is a clear need to develop the knowledge of the biological and ecological functioning of soil; (ii) this should not happen at the expense of a strong general knowledge of the fundamentals of soil science; (iii) future soil scientists should be trained to have a more holistic appreciation of soil rather than be trained as a specialist of a specific aspect of soil science only. Being able to exchange knowledge with farmers, knowing how to assess soil fertility, quality or health and how to improve them are viewed as essential skills for the future. These findings offer a clear path for the evolution of soil science education curricula across Europe.

Microbial-explicit processes and refined perennial plant traits improve modeled ecosystem carbon dynamics

Globally, soils hold approximately half of ecosystem carbon and can serve as a source or sink depending on climate, vegetation, management, and disturbance regimes. Understanding how soil carbon dynamics are influenced by these factors is essential to evaluate proposed natural climate solutions and policy regarding net ecosystem carbon balance. Soil microbes play a key role in both carbon fluxes and stabilization. However, biogeochemical models often do not specifically address microbial-explicit processes. Here, we incorporated microbial-explicit processes into the DayCent biogeochemical model to better represent large perennial grasses and mechanisms of soil carbon formation and stabilization. We also take advantage of recent model improvements to better represent perennial grass structural complexity and life-history traits. Specifically, this study focuses on: 1) a plant sub-model that represents perennial phenology and more refined plant chemistry with downstream implications for soil organic matter (SOM) cycling though litter inputs, 2) live and dead soil microbe pools that influence routing of carbon to physically protected and unprotected pools, 3) Michaelis-Menten kinetics rather than first-order kinetics in the soil decomposition calculations, and 4) feedbacks between decomposition and live microbial pools. We evaluated the performance of the plant sub-model and two SOM cycling sub-models, Michaelis-Menten (MM) and first-order (FO), using observations of net ecosystem production, ecosystem respiration, soil respiration, microbial biomass, and soil carbon from long-term bioenergy research plots in the mid-western United States. The MM sub-model represented seasonal dynamics of soil carbon fluxes better than the FO sub-model which consistently overestimated winter soil respiration. While both SOM sub-models were similarly calibrated to total, physically protected, and physically unprotected soil carbon measurements, the models differed in future soil carbon response to disturbance and climate, most notably in the protected pools. Adding microbial-explicit mechanisms of soil processes to ecosystem models will improve model predictions of ecosystem carbon balances but more data and research are necessary to validate disturbance and climate change responses and soil pool allocation.

Energi terbarukan: analisis kebijakan pemanfaatan biodisel kelapa sawit sebagai bahan bakar nabati nasional di tengah kontroversinya sebagai faktor pendorong deforestasi

Background: In the midst of the controversy over bioenergy or biofuels as a driving factor for global deforestation, Indonesia is dependent on its palm oil commodities which have been built for years and consume millions of hectares of land. Indonesia's dependence on these commodities to meet domestic and foreign markets is regulated by the biodiesel policy or ESDM Ministerial Decree No. 12 of 2015 concerning the Provision, Utilization and Trading Administration of Vegetable Fuels (Biofuel) as Other Fuels, which states that the use of biodiesel levels in the future will continue to increase, from B20 to B30, then to B40 and so on. However, to be able to meet these policy targets, there is a risk of land clearing. This policy paper discusses what important issues from an economic, social and environmental perspective are related to the development of the palm oil biodiesel industry in Indonesia and what needs to be prioritized in determining future government policy to ensure that sustainable development can be pursued and emission reductions reach targets. Methods: The research method used in this paper is a qualitative approach and descriptive analysis of data collected from literature study. Findings: Apart from that, there are various issues regarding palm oil management, both from a social, economic and environmental perspective, that still need to be addressed, considering that Indonesia is internationally committed to reducing its greenhouse gas emissions by 30% by 2030. Conclusion: Overall In short, there are five recommendations for palm oil biodiesel policy for the future, namely: 1. There is a need for clear data that can support policy decision making; 2. Indonesia needs to evaluate fossil fuel subsidy policies from developing countries that have succeeded in developing their renewable energy sectors; 3. There is a need for intensification, technological improvisation and sustainable agricultural practices on existing oil palm plantation land to meet national bioenergy needs; 4. Prioritizing collaboration between sectors in developing the industry; and 5. The government must be firm in determining a consistent future palm oil biodiesel policy so as not to harm many parties.

Ecotoxicological soil risk assessment under the new soil exposure framework – an impact assessment

For the European risk assessment (RA) for soil organisms exposed to plant protection products (PPPs) endpoints from ecotoxicological laboratory studies are compared with predicted environmental concentrations in soil (PECSOIL) at first tier. A safety margin must be met; otherwise, a higher tier RA is triggered (usually soil organism field studies). A new tiered exposure modeling guidance was published by EFSA to determine PECSOIL. This work investigates its potential impact on future soil RA. PECSOIL values for >50 active substances and metabolites were calculated and compared with the respective endpoints for soil organisms to calculate the RA failure rate. Compared to the current (FOCUS) exposure modeling, PECSOIL values for all EU regulatory zones considerably increased, e.g., resulting in active substance RA failure rates of 67%, 58% and 36% for modeling Tier-1, Tier-2 and Tier-3A, respectively. The main driving factors for elevated PECSOIL were soil bulk density, crop interception and wash-off, next to obligatory modeling and scenario adjustment factors. Spatial PECSOIL scenario selection procedures result in agronomically atypical soil characteristics (e.g., soil bulk density values in Tier-3A scenarios far below typical European agricultural areas). Consequently, exposure modeling and ecotoxicological study characteristics are inconsistent, which hinders scientifically reasonable comparison of both in the RA.

A forecasting model for oil prices using a large set of economic indicators

AbstractThis paper examines the predictability of the changes in Brent oil futures prices using a multilayer perceptron artificial neural network that exploits the information contained in the largest possible set of economic indicators. Feature engineering is employed to identify the most important predictors of the change in Brent oil futures prices. We find that oil‐market‐specific variables are important predictors. Our findings also suggest that forecasts of the change in the Brent oil futures prices from the multilayer perceptron that exploits the informational content of all and oil‐market‐specific predictors exhibit higher statistical forecast accuracy than the random walk. Tests of forecast optimality indicate that the forecasts generated using oil‐market‐specific predictors are optimal. We discuss the policymaking and practical relevance of our results.

Time–frequency correlation and risk spillovers between Euramerican mature and Asian emerging crude oil futures markets

PurposeThis paper aims to empirically investigate time–frequency linkages between Euramerican mature and Asian emerging crude oil futures markets in terms of correlation and risk spillovers.Design/methodology/approachWith daily data, the authors first undertake the MODWT method to decompose yield series into four different timescales, and then use the R-Vine Copula-CoVaR to analyze correlation and risk spillovers between Euramerican mature and Asian emerging crude oil futures markets.FindingsThe empirical results are as follows: (a) short-term trading is the primary driver of price volatility in crude oil futures markets. (b) The crude oil futures markets exhibit certain regional aggregation characteristics, with the Indian crude oil futures market playing an important role in connecting Euramerican mature and Asian emerging crude oil futures markets. What’s more, Oman crude oil serves as a bridge to link Asian emerging crude oil futures markets. (c) There are significant tail correlations among different futures markets, making them susceptible to “same fall but different rise” scenarios. The volatility behavior of the Indian and Euramerican markets is highly correlated in extreme incidents. (d) Those markets exhibit asymmetric bidirectional risk spillovers. Specifically, the Euramerican mature crude oil futures markets demonstrate significant risk spillovers in the extreme short term, with a relatively larger spillover effect observed on the Indian crude oil futures market. Compared with India and Japan in Asian emerging crude oil futures markets, China's crude oil futures market places more emphasis on changes in market fundamentals and prefers to hold long-term positions rather than short-term technical factors.Originality/valueThe MODWT model is utilized to capture the multiscale coordinated motion characteristics of the data in the time–frequency perspective. What’s more, compared to traditional methods, the R-Vine Copula model exhibits greater flexibility and higher measurement accuracy, enabling it to more accurately capture correlation structures among multiple markets. The proposed methodology can provide evidence for whether crude oil futures markets exhibit integration characteristics and can deepen our understanding of connections among crude oil futures prices.

Identifying dynamic risk spillovers between crude oil and downstream industries: China's futures market perspective.

Interactions between crude oil and its downstream products are crucial but complex. The main purpose of this study is to examine the risk spillover relationships between the crude oil futures market and the petrochemical downstream futures market in the context of the COVID-19 epidemic in China. By combining the dynamic conditional correlation-generalized autoregressive conditional heteroskedasticity (DCC-GARCH) model and the Diebold-Yilmaz spillover index based on time-varying parameter-vector autoregression (TVP-VAR-DY), we investigate the dynamic correlations between Shanghai crude oil futures (INE) and the downstream futures in China's petrochemical industry chain. At the same time, we also incorporate the representative global crude oil futures (BRENT and WTI) in our study as a comparative analysis. Our results show a significant positive correlation between three crude oil futures and China's downstream future products, with a more pronounced link observed between INE and the downstream futures market. Moreover, the correlation between crude oil futures and various downstream products exhibits heterogeneity; that is, direct derivatives of crude oil show higher sensitivity to price fluctuations compared to products with longer production chains. Furthermore, the spillover results indicate that the international crude oil futures, particularly BRENT, primarily function as spillover transmitters, while INE mainly serves as the recipient. In the post-pandemic period, the international crude oil market still exhibits a high spillover effect, and the spillover effect of INE to polyvinyl chloride, pure terephthalic acid, and bitumen futures increased, reflecting market recovery in China to some extent. These results provide potential insights for policymakers, financial institutions, industry participants, and investors, emphasizing the importance of enhanced risk management, diversified investment strategies, and attention to market dynamics.

The Influence of Bioclimates and Soil Physicochemical Properties on Bacterial and Archaeal Communities from Forest Ecosystems in Côte d’Ivoire (West Africa)

Archaea and bacteria communities play pivotal roles in tropical forest ecosystems’ functioning, especially nutrient cycling, plant phenology, and health. The objective of this study was to explore the diversity of archaeal and bacterial communities in forest soil ecosystem of Côte d’Ivoire and to identify abiotic factors that influence their composition. Using high-throughput amplicon sequencing targeting the V4V5 hypervariable region of the 16S ribosomal RNA gene, we analyzed 22 soil samples taken from the 2 main forest areas of Côte d’Ivoire, namely the semi-deciduous moist forest and the evergreen moist forest, both of which are located in the humid and sub-humid areas of the country. The analysis revealed that the biodiversity at the phyla level was congruent with previous studies. Richness and Shannon diversity indices revealed the dominance of bacteria over archaea in all studied soils. Moreover, the predominant bacterial community consisted of Proteobacteria (29.8%), Acidobacteria (15.5%), and Actinobacteria (14.2%), while the archaeal community was dominated by Thaumarchaeota (1.93%). However, at the genus level, patterns emerged. The most abundant and ubiquitous members at the genus level included Bradyrhizobium, Rhodoplanes, Bacillus (bacteria), and Nitrosophaera (archaea). While bacterial core microbiome members were found in almost all soils, Nitrososphaera genus were selective to sub-humid bioclimate and cropland land use. These patterns were correlated to the soils’ physicochemical characteristics, bioclimate, and land use. This study sheds light on the intricate relationships between abiotic factors and microbial communities in Côte d’Ivoire’s forest soils and helps to identify keys species for future soil management.

Forecasting realized volatility of crude oil futures prices based on machine learning

AbstractExtending the popular HAR model with additional information channels to forecast realized volatility of WTI futures prices, we show that machine learning‐generated forecasts provide better forecasting quality and that portfolios that are constructed with these forecasts outperform their competing models resulting in economic gains. Analyzing the selection process, we show that information channels vary across forecasting horizon. Variable selection produces clusters and provides evidence that there are structural changes with regard to the significance of information channels.

Unveiling the critical nexus: Volatility of crude oil future prices and trade partner’s cash holding behavior in the face of the Russia–Ukraine conflict

This study investigates the spillover effects of the Russia–Ukraine conflict on corporate finance, particularly focusing on cash-holding decisions of Chinese-listed firms from Q1 2020 to Q1 2023. Utilizing a Difference-in-Difference approach, we analyze how firms with trade links to Russia and Ukraine adjust their cash holdings in response to the conflict. A significant aspect of our analysis is the emphasis on Shanghai crude oil futures prices, alongside West Texas Intermediate (WTI) prices, to understand the impact of oil market volatility on these decisions. Our findings reveal that such volatility, especially in Shanghai crude oil futures, significantly influences firms’ cash holdings, with an increased tendency to hoard cash in times of rising uncertainties. This behavior is particularly pronounced in non-state-owned, general trade, and export firms. The study highlights how geopolitical tensions and fluctuating oil prices affect corporate financial strategies, offering insights for policymakers and corporate managers in navigating economic uncertainties.

Economic transformation based on leading commodities through sustainable development of the oil palm industry

The oil palm industry is a strategic and leading sector of agriculture that is developing in Indonesia. Riau is a province in this country that has quite large natural resources in the plantation with the largest contribution being oil palm. This study aims to determine the form of economic transformation based on superior commodities through the development of a sustainable palm oil industry. The study adopts a mixed-method approach, employing a sequential explanatory model to gather a comprehensive understanding of the oil palm industry in Bengkalis Regency, Indonesia. Quantitative data collection precedes qualitative data analysis, allowing for a deeper exploration of the research topic. The analysis units encompass the oil palm industry, households, and village officials, ensuring a holistic examination of the subject. Data collection involves a range of methods, including surveys, interviews, observations, and focus group discussions, engaging diverse stakeholders such as community members, industry representatives, and government officials. Secondary data from relevant agencies and previous research are also integrated. Ethical considerations are emphasized in data collection and dissemination, ensuring transparency and balance in reporting. Overall, the methodology is well-structured and comprehensive, enabling a thorough examination of the industry's sustainability and development. The research results indicate that the oil palm manufacturing industry is a leading sector and has been categorized as sufficiently sustainable based on different perspectives. Through an optimistic scenario, the government must make efforts and total support to improve the important factors that influence the development of the palm oil processing industry in a sustainable manner, including the community empowerment program, future palm oil prospects, implementation of environmental management.

Where will the next oil spill incident in the Niger Delta region of Nigeria occur?

Oil spill incidents are almost a daily occurrence within the Niger Delta region of Nigeria with far-reaching environmental, economic and social consequences. This study aimed at understanding the spatial and temporal context of the problem as a panacea for forecasting likely locations of oil spill incidents within the region. About 76.77% of crude oil spilt in the Niger Delta is lost to the environment with only about 23% of the crude oil recovered from the environment. This represents a very worrying statistic in terms of the known and unknown negative impacts of oil spills. Space Time Pattern Mining (STPM) tools were adapted to explore and interrogate historical spill data. Time series forecasting was then used for forecasting possible locations of future oil spills within the region. Results show that there is a pattern of oil spill occurrences in the Niger Delta with statistically significant hotspots identified in Rivers State, Bayelsa State and Delta State. The forecast root mean square error (RMSE) and forecast validation RMSE are −1.016328 and 1.035992 respectively. This suggests an ability of the model to fairly predict likely locations of future oil spills. This was further verified by counting the number of spills that occur within any area based on the predicted likelihood of spill occurrence. This study has shown that STPM tools can be deployed to understand the occurrence and prediction of oil spill incidents. This will ultimately aid in the deployment of scarce management resources to where they are most needed.

Implied roughness in the term structure of oil market volatility

This paper analyses the attributes and the significance of the roughness of oil market volatility. We employ unspanned stochastic volatility models driven by rough Brownian motions that yield semi-analytical prices for future options entailing efficient calibration applications. By performing a Monte Carlo simulation study, we show that the semi-analytical pricing performs well thus establishing its efficiency for calibration applications. Thus we calibrate option prices written on oil futures and provide empirical evidence of the roughness in oil volatility. Introducing just one additional parameter, the Hurst parameter, indicating the roughness of the volatility improves the calibration by almost a factor of 10. The calibrated option-implied Hurst parameter varies over time, but the entire set of parameters becomes more stable than in the non-rough case corresponding to a fixed Hurst parameter 1/2. These results underscore the importance to model the time dependency of the roughness of oil market volatility.

How does Shanghai crude oil futures affect top global oil companies: The role of multi-uncertainties

The international influence of Shanghai crude oil futures (INE) has been increasing year by year. This study adopts the connectedness network method to construct a risk spillover network between INE and the top 20 global oil companies and measures the static characteristics and dynamic trends of return and risk spillovers. wMoreover, the core factors affecting the systemic risk are identified from the dimensions of crude oil implied volatility, geopolitical risk, US economic policy uncertainty, and climate concern. The results reveal that the overall connectedness between INE returns and global oil company stock price returns is high, with oil companies located in the Americas and at the upstream end of the chain experiencing greater spillovers in the system. Furthermore, INE is a net recipient of risk spillovers in the system, being subject to spillovers from most oil companies. In a dynamic scenario, the total system spillover index is susceptible to unexpected events, and there is asymmetry in the system risk spillover between INE and oil company returns. Meanwhile, crude oil implied volatility and geopolitical risk are the main influences on the systematic risk of INE and oil company returns.

Offshore oil and gas infrastructure electrification and offshore wind: a legal exploration

Abstract The oil and gas and renewable energy sectors are increasingly coming together as traditional hydrocarbon producers are exploring the large-scale integration of renewables in fossil-fuel projects. One option is the electrification of oil and gas production platforms in the offshore environment utilizing offshore wind energy to power the asset’s operations. This article assesses the rationale for such a shift as well as regulatory avenues and barriers to the electrification of offshore oil and gas assets through offshore wind energy technology. While the article’s explorations are of a general conceptual nature, this article studies existing and planned developments in Norway and Atlantic Canada. This article discusses key factors to determine the legal nature of different electrification project models and proposes solutions to identify the likely legislative and regulatory regime(s) which will govern. The article concludes that reforms for a forward-thinking legal and regulatory environment for the offshore space will have to re-examine the role of existing (platform) and new (wind but also oil and gas) offshore infrastructure and the associated regime that applies to these projects. Currently, in the Norwegian and Canadian contexts, these discussions are somewhat exploratory. They do, however, underline the importance of planning the co-development of offshore wind energy projects with existing and future oil and gas projects and to highlight the need for greater clarity in the evolving design of legal and regulatory frameworks to support the future of the global offshore energy sector.

Technological innovation and its influence on energy risk management: Unpacking China’s energy consumption structure optimisation amidst climate change

In the context of intensifying climate challenges, adept energy risk management is more pertinent than ever. This research pioneers an in-depth exploration into China’s pronounced reliance on high-polluting fossil fuels, utilising a decade’s worth of provincial data (2010–2020) to shed light on the intricate dynamics between technological innovation and energy consumption structure refinement. Notably, our findings unveil that technological advancements act as catalysts in streamlining energy consumption structures, serving as a bulwark against emergent climate-related risks. Yet, this positive trajectory is not immune to disruptions: volatility in crude oil futures prices has the potential to dampen these benefits, ushering in heightened financial risks. Our work further underscores pronounced regional variances; technological innovation yields diminished returns in the central and western regions compared to their eastern counterparts. An intriguing observation is the resilience exhibited by coal-dependent provinces to technological evolution, pointing towards entrenched energy infrastructure challenges. Crucially, this study is among the first to identify the dual roles of industrial structure evolution and energy pricing dynamics as mediators in energy risk management. Drawing from these insights, we advocate for a proactive harnessing of technological innovation, not merely as a tool, but as an imperative to drive China’s energy transformation, foster sustainable consumption, and lay the foundation for a fortified green and low-carbon technological ecosystem.

Exploring the Dynamics of CPO Spot and Futures Prices in Relation to Global Crude Oil Price: Evidence from India using ARDL Model Approach and Granger Causality Tests

This study examines the connection between Crude Palm Oil (CPO) spot and futures prices, and global crude oil prices using ARDL model and Granger causality tests to analyze data collected between January 2011 and April 2022, including CPO spot and futures prices, MCX, and WTI Crude oil futures. The results from the coefficient estimations show that both CPO future price percentage changes and crude oil price have a statistically significant impact on the CPO spot price. The study also reveals a long-term relationship between the dependent and independent variables in the level’s comparison. The study also demonstrates that global crude oil prices can significantly influence the spot and futures prices of CPO. This research provides useful insight for stakeholders in the palm oil industry, policymakers, and investors.