Do the Major Oil Companies Anticipate OPEC Production Allocations?

35 Pages Posted: 17 Jul 2008

See all articles by John L. Simpson

John L. Simpson

Curtin University - Centre for Research in Applied Economics

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Date Written: July 1, 2008

Abstract

This paper uses regression and multivariate analysis to examine oil stock market and large oil company stock price data in 30 and 60 day windows either side of OPEC production allocation meetings. The study continues on to investigate cointegration and exogeneity over the full period in the sample. The results justify asking the question as to whether or not oil companies can anticipate the outcomes of production allocation meetings in the OPEC cartel. Do these companies have a surrogate cartel in OPEC? It is put that the pricing of crude oil has more to do with the behaviour of oil market protagonists than supply and demand forces and this has grave implications for the health of the global economy and financial system.

Keywords: OPEC, anticipation, crude oil returns, regression, production allocation

JEL Classification: F40

Suggested Citation

Simpson, John L., Do the Major Oil Companies Anticipate OPEC Production Allocations? (July 1, 2008). Available at SSRN: https://ssrn.com/abstract=1162084 or http://dx.doi.org/10.2139/ssrn.1162084

John L. Simpson (Contact Author)

Curtin University - Centre for Research in Applied Economics ( email )

GPO Box U1987
Perth, Western Australia 6845
Australia

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