Applying the simultaneous-equation model, this study finds that the output elasticity with respect to the real oil price is estimated to be -0.042, indicating that if the real oil price rises 10%, real GDP would decrease by 0.42%. In addition, real output in Korea is positively associated with the money supply, real deficit spending, and the real stock price and negatively influenced by real de...

ƒ In addition to accurate forecasts of the price of oil, policy-makers are interested in evaluating the risks associated with the baseline forecast to gauge the implications of alternative oil price paths for the economic outlook. A structural model of the global oil market can be used to develop risk scenarios for oil price forecasts, based on hypothetical assumptions about future demand and s...

According to International Energy Outlook 2007 the total world demand of energy is projected to increase through 2030 about 95% for the non-OECD region and 24% for OECD nations. Crude oil is one of the most critical energy commodities while with coal and natural gas are projected to provide roughly the 86% share of the total US primary energy supply in 2030. In this paper, we use wavelet neural...

Beginning in 2009, in many advanced economies, policy rates reached their zero lower bound (ZLB). Almost at the same time, oil prices started rising again. We analyze how the ZLB affects the propagation of oil shocks. As these shocks move inflation and output in opposite directions, their effects on economic activity are cushioned when monetary policy is constrained. The burst of inflation from...

This study seeks to explain why crude oil prices fluctuate, the main cause being the quota regime, which characterises the OPEC agreements. Given that the Saudi oil supply is inelastic in the short term, a shock in the oil market is accommodated by an immediate price change. In contrast, a dominant firm behaviour in the long term causes an output change, which is accompanied by a smaller price ...

This paper proposes a new method for crude oil price forecasting based on support vector machine (SVM). The procedure of developing a support vector machine model for time series forecasting involves data sampling, sample preprocessing, training & learning and out-of-sample forecasting. To evaluate the forecasting ability of SVM, we compare its performance with those of ARIMA and BPNN. The expe...

If you have regular occasion to fill your car’s tank with gas, you know that the price of gasoline has recently been both high and volatile a consequence, for the most part, of similar movements in the price of crude oil. The weekly average price for a barrel of West Texas intermediate, a standard grade of crude oil, hovered around $30 during the second half of 2003 but began to rise around the...

a r t i c l e i n f o JEL classifications: C51 N70 Keywords: Crude oil price volatility GARCH Covariates Modified dummy variables OPEC announcements WTI crude oil Several times a year, OPEC hosts conferences among its members to agree on further oil production policies. Prior to OPEC conferences, there is usually rampant speculation about which decision concerning world oil production levels (n...