Assessing the Factors Behind Oil Price Changes
39 Pages Posted: 1 Feb 2008
Date Written: January 2008
Abstract
The rapid rise in the price of crude oil between 2004 and the summer of 2006 are the subject of debate. This paper investigates the factors that might have contributed to the oil price increase in addition to demand and supply for crude oil, by expanding a model for crude oil prices to include refinery utilization rates, a non-linear effect of OPEC capacity utilization, and conditions in futures markets as explanatory variables. Together, these factors allow the model to perform well relative to forecasts implied by the far month contracts on the New York Mercantile Exchange and are able to account for much of the $26 rise in crude oil prices between 2004 and 2006.
Keywords: Oil prices, Refinery industry, OPEC
JEL Classification: C53, Q41
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Evaluating the Empirical Performance of Alternative Econometric Models for Oil Price Forecasting
By Matteo Manera, Chiara Longo, ...
-
Physical Market Determinants of the Price of Crude Oil and the Market Premium
-
What Can Be Said About the Rise and Fall in Oil Prices?
By Victoria Saporta, Merxe Tudela, ...
-
Energy and Emissions: Local and Global Effects of the Rise of China and India
-
Leverage vs. Feedback: Which Effect Drives the Oil Market?
By Sofiane Aboura and Julien Chevallier
-
Oil Price Forecast Evaluation with Flexible Loss Functions
By Andrea Bastianin, Matteo Manera, ...
-
The Fundamental and Speculative Components of the Oil Spot Price: A Real Option Value Approach
-
Multi Model Forecasts of the West Texas Intermediate Crude Oil Spot Price
By Martin Emery, Laura Ryan, ...