A Review of the Evidence on the Relation Between Crude Oil Prices and Petroleum Product Prices
47 Pages Posted: 10 Oct 2018
Date Written: September 12, 2018
We review a large body of the empirical literature focusing on the relation between petroleum product prices and oil prices and discuss the evidence on the direction of causality between crude oil prices and petroleum product prices. In addition, we survey the literature on the much-debated question of whether petroleum product prices respond differently to increases versus decreases in oil prices, which Bacon (1991) labeled the “rockets and feathers” phenomenon.
Keywords: Oil Prices, Petroleum Product Prices, Energy Economics, Commodities
JEL Classification: G13, Q40, Q41, Q47
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