Crude Prices Research Articles

Crude Price Changes and Nigeria’s Foreign Reserves, 2008-2023

The study investigated the correlational association between crude price and foreign reserves using the Nigerian economy as the jurisdiction of interest. The study covered the period 2008 to 2023 representing a 25year period. Bivariate pairwise correlational matrix was used to find that a highly significant positive linear association exists between crude price and foreign reserves. Following the findings arising from this study, it is recommended that the country should take advantage of crude price movement in building its foreign reserves given that increase in crude price will likely lead to a rise in revenue from crude sale. A high foreign reserve can act as stabilization fund for exchange rate, debt management and other shocks from international financial flows. Building foreign reserves can be beneficial in managing such exposures to the advantage of the Nigerian economy.

HYBRID MODEL OF SINGULAR SPECTRUM ANALYSIS WITH AUTOREGRESSIVE INTEGRATED MOVING AVERAGE AND FUZZY TIME SERIES FOR INDONESIAN CRUDE PRICE FORECASTING

This study discusses a hybrid model of Singular Spectrum Analysis (SSA) with Autoregressive Integrated Moving Average (ARIMA) and Fuzzy Time Series (FTS) for forecasting the Indonesian Crude Price (ICP). SSA is considered to capture the deterministic component of the data while the ARIMA and FTS are to represent the stochastics one. The data that used in this study are ICP per month from January 2017 to May 2023. The data from January 2017 to December 2022 are used as insample data, while the data from January to May 2023 are used as outsample data. The insample data is firstly modeled by SSA and the residuals are then modeled by ARIMA, referred to as the hybrid SSA-ARIMA. By the same procedure, the hybrid SSA-FTS model is also constructed to the insample data. Based on the experiment, the hybrid SSA-ARIMA produces Mean Absolute Percentage Error values 8.08% for an insample and 7.10% for an outsample data. These values are less than those obtained by hybrid SSA-FTS. Therefore, the hybrid SSA-ARIMA is recommended for forecasting the monthly ICP.

The Effect of Selected Macroeconomic Variables on Sharia Mutual Funds in Indonesia: A Multidimensional Analysis with VECM Approach

This study determined the short-term and long-term effects of Inflation, Indonesia crude price, and Indonesia sharia stock index on sharia mutual funds in Indonesia. This research utilized secondary data from January 2014 - December 2023 sourced from the Financial Services Authority (OJK), Central Agency on Statistics (BPS), Ministry of Energy and Mineral Sources of the Republic of Indonesia (KESDM). This study uses long run and short run VECM tests. The results show that the long-run VECM estimates indicate that the Inflation variable and the Indonesian sharia stock index have a long-term significant positive effect on Islamic mutual funds in Indonesia. While the Indonesian crude price has a long-term significant negative effect on Islamic mutual funds in Indonesia. The short run VECM estimation results show that there are no variables that affect Islamic mutual funds in Indonesia. Granger causality test reveals the causal relationship between various variables on Islamic mutual funds. The conclusions obtained can be used as a reference for potential investors in making investment decisions for the short and long term.

Does crude oil price volatility affect risk-taking capability in business group firms: evidence from India?

PurposeThe study tests risk-taking and risk-aversion capabilities while distinguishing between business group firms and stand-alone firms and considering oil price volatility. Second, this attempt to study the linkage between risk-taking during market down movements and when the firms have established themselves as product market leaders. Third, this study analyses the “sentiment” state, where it explores the reaction of corporations when the market is in the negative direction, and lastly, it explores the linkage between product market competition and risk-aversion.Design/methodology/approachThis study uses financial information for 1,273 non-financial companies and other required data from various sources. The study employs panel data and utilizes different empirical methodologies, including the generalized method of moments (GMM) estimator, to test the stated hypotheses.FindingsWe find that the business group firms have more risk-taking proficiencies compared with the stand-alone firms. Moreover, this study discovers that the corporates avoid taking risks when the market is not performing well. Also, when the market is down and crude prices are high, the management expects high earnings in the future, willingly takes risks and shows that product market leaders do not follow the risk-aversion strategy.Practical implicationsThe empirical results indicate that oil price movement can restrict management’s behaviour when choosing a risky investment project. Management should develop a robust policy that follows the group of firms. In the policy, the management should describe the level of risk that may be taken by the firm and implement it when required.Originality/valueSince we do not find any studies in this context, then there is a major and essential gap in the literature that this study should fill.

Research on the Prediction of the Global Price of WTI Crude

Research on the Prediction of the Global Price of WTI Crude

Effect of Selected Macroeconomic Variables on External Reserves Management in Nigeria (1981-2022)

This study examined the Effect of selected macroeconomic variables on External Reserves Management in Nigeria (1981-2022) with external reserves as a dependent variable and international crude oil price movement, exchange rate volatility, inflation, monetary policy rate, public expenditure, economic growth, external debt service payment, and trade Openness as independent variables. With dataset from the Central bank of Nigeria Statistical Bulletin and Autoregressive Distributive Lag (ARDL) model as the key estimation technique, the study found that crude price movement, economic growth, public expenditure growth, all had positive and significant impact on external reserves management. Exchange rate volatility, monetary policy rate and trade openness were found to have adverse and significant effects on external reserves. It is therefore recommended that effective and efficient fiscal and monetary policy measures be adopted to enhance the management of external reserves.

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

AI, Influencers, and Grit: How Apache’s 8-Year Quest To Build Its Own Drilling Advisor Achieved Full Adoption

When oil prices tumble, upstream research and development projects are among the first casualties. Many are put on the shelf. Few are ever taken off. Then there’s what happened at Apache Corp. More than a decade ago, the Houston-based independent oil and gas producer, which following a restructuring is now a subsidiary of APA Corp., was among a small cadre of operators working at the fore of automated drilling technology. As a first adopter, Apache had gone so far as to develop a newbuild automated rig design for its onshore shale fields in Texas. Then in mid-2014, crude prices plummeted nearly 60% over a 7-month period. The heady days of $100/bbl oil were replaced by the era of “lower for longer,” derailing Apache’s ambitious plan to build its pioneering prototype. That could have been the end of the story. But less than a year after the ambitious capital project was scrapped, something else emerged in its place. While AI-based automation was out, Apache’s drilling team was given a chance to develop the next best thing: an AI-based drilling advisory system. “We saw that there was at least a small opportunity to do something more with our rig data—that 1-Hz real-time data—by combining it and mashing it up with contextual data so that it could be something useful,” said Michael Behounek, a former director of drilling, completions, and workover performance and leader of the project for Apache where he spent the past 13 years before taking early retirement. Now a managing partner of an upstream digital consulting startup called Emerja, Behounek spoke at the recent SPE Annual Technical Conference and Exhibition while presenting SPE 215132. The paper outlines how after 8 years that small opportunity turned into a 10% year-over-year reduction in drilling costs. The system, a presumed multi-million dollar value creator, was adopted across all of Apache’s contracted rigs in 2018, playing an increasingly important role in the drilling of more than 1,700 wells across a wide spectrum of geologies. This track record spans nine onshore and offshore basins, with deployments of the system in the Permian Basin, Egypt, Canada, offshore Suriname, and the North Sea. Behounek said most of the reported cost savings stem from the models’ ability to trim rig time by predicting problems that would keep drillers from staying on bottom and turning to the right. That said, the paper, which is coauthored by Apache’s software partner Intellicess Inc., emphasizes that “the system only enables the opportunity—it is the field personnel and engineers taking the proper actions and decisions offered by the system that deliver the improvement.” Apache has shared several papers about the various components of the advisory program over the years but the most recent offers a holistic view of the strategy that led to companywide adoption. Of the dozens of takeaways it offers, some of the biggest follow.

The effects of economic and financial shocks on private investment: A wavelet study of return and volatility spillovers

This paper examines the linkage between private investments and shocks in economic and financial indicators. Using data from India, we study the return and volatility spillovers from crude price, credit availability, real exchange rate, inflation, output gap, government spending, and economic policy uncertainty to private investments. We combine the ARMA-GARCH model with wavelet multiresolution analysis to capture the multiscale features of return and volatility spillovers among the time series. Our findings uncover spillovers in the time-scale decomposed series that are otherwise not observable in the original data, thereby throwing new light on the private investment-macroeconomic shock relationship. Private investment receives return spillovers from all variables at lower frequencies. Volatility spillovers from credit availability, exchange rate, output gap, and public investment exist at higher frequencies. The findings are robust to different forecast horizons, window sizes, frequency of data observation, and methodology of volatility extraction.

The Influence of OPEC+ on Oil Prices: A Quantitative Assessment

Since 2017, a new coalition of oil producers led by OPEC and Russia (known as OPEC+) implemented production cuts to limit downward pressure on crude prices. The Covid-19 shock led to a temporary collapse of this coalition and to a price war among OPEC+ members, which contributed to the oil price slump that had originally been caused by widespread containment measures. As the oil market balance seems to crucially hinge on the stability of this coalition, we draw on the 2017–2020 experience to assess the effectiveness of OPEC+ in sustaining oil prices. Using a counterfactual analysis based on two complementary structural vector autoregression (SVAR) models, we find that the impact of OPEC+ on the price of oil was small, owing to significant deviations of oil producers from their assigned quotas. On average, without the OPEC+ cuts, the oil price would have been 6 percent (4 USD) lower than observed.

Oil–gas price relationships on three continents: Disruptions and equilibria

In this paper, we revisit traditional gas pricing formulas and show the ever-changing relationships between natural gas and oil prices in Europe, the United States, and Japan between 2009 and 2021. The results suggest a stronger oil–gas link for all investigated markets after 2019, significantly impacted by fundamental supply and demand factors. However, the strength of the equilibria link differs across markets due to different price formation processes under the impact of the COVID-19 pandemic and the Ukraine war. For Japanese LNG prices, our results imply an enduring impact of oil-price indexation with a tight link to monthly crude prices. TTF and monthly oil prices enter a temporary equilibrium in times of high market volatility, whereby the long-term equilibrium dissipates. Despite the absence of oil indexation in the North American market, we find evidence of re-coupling of oil and gas prices given the demand shock of the COVID-19 pandemic. These findings are relevant to policy makers to assess market inefficiencies caused by the European gas crisis.

Analysis of the relationship between oil rent and crude oil production in Cameroon: Evidence from ARDL and NARDL models

This study examines the symmetric and asymmetric impact of crude oil production on oil rent in Cameroon by taking into account the price of crude, human development index (HDI) and corruption over the period 1977–2019; as well as the causal links between the variables. This study uses Augmented Dickey-Fuller and Zivot-Andrews tests to check the stationarity of the variables. Subsequently, ARDL model is estimated and robustness tests are performed to attest the model's validity. The bound test is applied to confirm the existence of long-term relationships. NARDL model follows the same steps and ends with the Wald test to confirm asymmetric effects of variables. Finally, the Toda-Yamamoto causality test is applied to establish the different influences between the variables under study. The main results of this research confirm the existence of oil resource curse in Cameroon, triggered in the long run by the negative and significant linear impact of crude production on oil rent and by the negative and significant effect of positive shocks to crude production on oil rent in the long run. Furthermore, there is a two-way causality between oil rent and crude production. The current study offers a policy orientation according to which a good mastery of crude prices and an optimal social policy, a real barrier against corruption and a stimulator of the quality of productivity, would be essential to perpetuate the exploitation of crude in order to continue to reap more profits. This would ultimately boost the economic structure of Cameroon. The oil rent should really be directed towards the economic circuit of Cameroon and reserve a large part for oil exploration which would allow the discovery of new deposits with a view to perpetuating the exploitation of crude. Cameroon should produce its own crude, transform it and consume it, in order to considerably reduce the effects of the oil curse. This study adds to the literature on the relationship between oil rent and crude production by showing how crude production affects oil rent in Cameroon. This study is the first to highlight the HDI and corruption as additional explanatory variables for oil rent.

The Impact of Crude Oil Price Fluctuations on Indian Economy

Abstract: The importance of Crude Oil has been on a rise in almost every single economy around the world. As economies grow, the requirement of this very vital resource is also fattening at a rapid pace. The Indian economy is rapidly expanding, as is its reliance on crude oil. For the period 2001-02 to 2020-21, the article investigates the reasons for changes in Crude Oil prices, as well as their implications for Indian Economic Development and GDP Growth. Because of the spike in crude prices, India's fuel and diesel prices have reached all-time highs. The current Indian economy is thriving despite rising trade disparities and persistent inflation. The goal of this study is to see how speculation and variations in crude oil prices affect Indian economic development, GDP growth, retail gasoline prices, financial markets (BSE), currency, and government finances. The study looked at how changes in oil prices affect Indian economic development via a variety of networks, including GDP, trade and investment characteristics, and other macroeconomic indicators.

THE CALCULATION OF EVAPORATION LOSS IN TANK Y AND TANK Z AT PT X PRABUMULIH

Calculation Evaporation Loss (Fixed Roof Tank) on Tank Y and Tank Z in SA Field, PT X Prabumulih. The calculation of evaporation loss consists of breathing loss and working loss. By calculating breathing loss and working loss, it can be known the losses that occur in a tank. The most significant parameters in influencing breathing loss are temperature and ullage tanks, while parameters that greatly affect working loss are true vapor pressure and trhoughput. After calculating, the total losses that occurred in Tank Y and Tank Z were obtained as much as 3.46 Bbl / day or 1,261.41 Bbl / year, if assumed with the Indonesian Crude Price (ICP) price of crude oil per barrel is currently US $ 117.62 then the loss incurred in Tank Y and Tank Z is Rp. 2,209,762,045 / year.

Impact of crude prices shock on GDP growth: using a linear, nonlinear and extreme value framework

PurposeRising crude oil prices are likely to have an asymmetric and nonlinear negative impact on GDP growth. The purpose of this paper is to ask the following questions: Does the effect of a crude price shock depend on the position of crude price cycle, i.e. is the effect of price shock larger/smaller in periods of already elevated crude price? And, does the effect of crude price shock depend on the position of the economy in the business cycle, i.e. does the crude price shock affect growth differentially in periods of low/high growth?Design/methodology/approachThe authors use a local linear projection (LLP) model to examine the asymmetric impact of crude price on GDP growth in an environment of high crude price. Next, a quantile regression model is used to account for differential impact on growth around high and low growth periods.FindingsResults from the LLP model show that when oil price is above $70, each additional percentage point of increase in oil price results in a 20 basis point (bps) drop in quarterly GDP growth rate on average. The impact is felt between the third and sixth quarters. When oil prices rise above $80, the impact is similar, with a sharper drop in growth (30 bps). The exercise with quantile regression shows that the impact of an increase in crude prices on growth is almost double at lowest quantiles of growth compared with the median.Originality/valueThere is a growing literature that evaluates the impact of oil price in developing economies. However, nonlinearities in crude price-GDP growth dynamics have not received enough attention, especially during phases of elevated crude price or a growth downcycle. The authors believe that accounting for such effects is especially relevant in the present economic scenario of high oil prices because of geopolitical crises and a period of vulnerable growth because of supply chain issues arising out of the pandemic. Using recent data from oil-importing emerging market economies such as India, this paper fills a crucial gap in the literature.

Assessing oil price volatility co-movement with stock market volatility through quantile regression approach

In times of financial crisis as well as during the COVID-19 era, gold and crude oil are the two commodities that have the most influence on global stock markets and the real economy. But research has mostly focused on the effects of these commodities' prices on their own, and the volatility of these commodities' prices as a whole hasn't gotten much attention. This research paper evaluates the impacts of crude oil prices volatility on shares marketplaces. This research examines the impact of crude oil uncertainty on the overall market returns in several economic sectors (China, Japan, the USA, France, and Germany) between 2000 and 2020 using the importance of the crude oil prices volatility index by applying a Quantile-on-Quantile regression(Q-Q), including dynamic copula with Markov-Switching. The results depict that because the effect of the OVX changes crosswise every single quantile level of stock return, it is cumbersome to ascertain the changes within the adverse impacts under varied stock market circumstances. Equally, to derive a comprehensive understanding of the correlation between crude costs volatility and stock returns, we utilize twofold quantile regression and quantile-quantile regression methods. We interpret these different features' impacts by applying the quantile regression approximates. Our experiential findings show that crude costs uncertainty has lop-sided impacts on stock returns; more so, these disproportionate performances alternate based not merely on the level of shares returns nonetheless equally crude market circumstances. More so, greater values match a robust risk decrease. Further, we observed heterogenous hedging effectiveness among the varied United States stock sectors. The findings demonstrate that growing crude prices volatility obtains an adverse impact on stock returns when the dual crude costs volatility and stock returns are minimal. Nevertheless, when shares returns are greater plus crude prices, volatility is minimal; growing crude volatility increases stock returns.

Effect of International Crude Oil Prices on Nigeria’s Gross Domestic Product from (1985-2020)

The aim of this study is to investigate the effect of oil price and its volatility on the development of Nigeria’s economy; this is due to the decline of the Nigerian economy as a result of decrease in daily oil production and plum-meting oil prices. The study assesses both long-and short-term effects of oil price volatility on real GDP in Nigeria. To achieve the basic objective of this research and to ascertain a comprehensive and robust outcome, the study adopted secondary data such as Nigeria’s Real GDP, Crude Oil Price, Real Exchange Rate and Foreign Direct Investment (FDI) that covers the period 1985 to 2020. In the analysis of data collected the research adopts Autoregressive Distributed Lag (ARDL) estimation technique. From the analysis, it can be deduced that in the short run, there is a positive impact of oil price on real GDP which is statistically significant at one percent level. As real exchange rate rises by one percent, the real GDP rises by 1.528 per cent, all things being equal. While the long run, the effect is positive and statistically significant measuring 14.67 positive effects on the economy. It also revealed that while oil price volatility affects economic development positively in the short term, its effect in the long term is not statistically significant. Findings from the study revealed that crude prices have a positive effect on GDP in Nigeria. Therefore, sustaining an equilibrium tempo of crude oil supply in Nigeria is crucial while the international community should allow the forces of demand and supply to play its role. This is because the rate of supply has effect on price and frequent change in price means high volatility. The article is structured as follows: introduction, literature review, methodology, data analysis, discussion of findings and recommendations.

Assessing the effect of political statements on oil price volatility

This research aims to show that statements made by politicians and public servants are a real tool for influencing the oil price. In the research, the authors used the technique for time series study that combines the consistent application of fractal analysis, regression analysis. According to the World Bank, the initial information base was created for daily Brent crude prices for the period from 29.04.2016 to 15.04.2020. A database for statements made by politicians and public servants via electronic media, information and telecommunication networks (including the Internet) was also created. Statements made by politicians and high-ranking military officers have a greater impact on the oil price than political, economic or social statements. All factors, except the one that characterizes politicians' and public servants' statements, affect the oil price, and it decreases by USD 0.02. The results suggest that if the oil price declines during a period of time, it will soon start to increase and this process will take about 18 days.

Impact of Russia-Ukraine War on Global Commodity Brent Crude Prices.

Impact of Russia-Ukraine War on Global Commodity Brent Crude Prices.

Crude oil pipeline constraints: A tale of two shales

Permian and Williston Basins are both experiencing takeaway pipeline bottlenecks. The price of Bakken sweet crude in Williston is still cointegrating with the national West Texas Intermediate (WTI) benchmark and downstream gasoline market while the Midland crude price in Permian Basin is not. The Midland price only reintegrated with WTI as well as regional gasoline price after the takeaway bottleneck is alleviated. This is because of the rail system developed in the Williston Basin that allows Bakken crude to reach other trading hubs and downstream markets even when pipeline bottlenecks occur. Blocking the constructions of pipelines will not prevent the flow of oil because more oil will be moved by trucks, railways, and barges. These shipping modes are more expensive and are not as safe and efficient as pipelines.