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The historic oil price fluctuation during the Covid-19 pandemic: What are the causes?
On 20 April 2020, the West Texas Intermediate (WTI) crude oil price dropped to negative levels for the first time in history. This study examines the factors underlying the historic oil price fluctuation during the Covid-19 pandemic. The autoregressive distributed lag (ARDL) bounds testing approach...
Autores principales: | , , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Elsevier B.V.
2021
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9756000/ https://www.ncbi.nlm.nih.gov/pubmed/36540339 http://dx.doi.org/10.1016/j.ribaf.2021.101489 |
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author | Le, Thai-Ha Le, Anh Tu Le, Ha-Chi |
author_facet | Le, Thai-Ha Le, Anh Tu Le, Ha-Chi |
author_sort | Le, Thai-Ha |
collection | PubMed |
description | On 20 April 2020, the West Texas Intermediate (WTI) crude oil price dropped to negative levels for the first time in history. This study examines the factors underlying the historic oil price fluctuation during the Covid-19 pandemic. The autoregressive distributed lag (ARDL) bounds testing approach incorporating a structural break is applied to the daily series from 17 January to 14 September 2020 to analyze long-run relationships and short-run dynamics. The results reveal that increases in Covid-19 pandemic cases, US economic policy uncertainty, and expected stock market volatility contributed to the fall in the WTI crude oil price, whereas the fall in the global stock markets appears to significantly reduce the fall. Furthermore, the Russia–Saudi Arabia oil price war and speculation on oil futures are shown to play a critical part in the collapse of the oil markets. The findings are consistent with our expectations. Although it is reasonable to assume that the solution to this oil crisis is a pick-up in global oil demand, which will occur only when the novel coronavirus is defeated, this study proposes policy recommendations to cope with the current oil price crash. |
format | Online Article Text |
id | pubmed-9756000 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2021 |
publisher | Elsevier B.V. |
record_format | MEDLINE/PubMed |
spelling | pubmed-97560002022-12-16 The historic oil price fluctuation during the Covid-19 pandemic: What are the causes? Le, Thai-Ha Le, Anh Tu Le, Ha-Chi Res Int Bus Finance Article On 20 April 2020, the West Texas Intermediate (WTI) crude oil price dropped to negative levels for the first time in history. This study examines the factors underlying the historic oil price fluctuation during the Covid-19 pandemic. The autoregressive distributed lag (ARDL) bounds testing approach incorporating a structural break is applied to the daily series from 17 January to 14 September 2020 to analyze long-run relationships and short-run dynamics. The results reveal that increases in Covid-19 pandemic cases, US economic policy uncertainty, and expected stock market volatility contributed to the fall in the WTI crude oil price, whereas the fall in the global stock markets appears to significantly reduce the fall. Furthermore, the Russia–Saudi Arabia oil price war and speculation on oil futures are shown to play a critical part in the collapse of the oil markets. The findings are consistent with our expectations. Although it is reasonable to assume that the solution to this oil crisis is a pick-up in global oil demand, which will occur only when the novel coronavirus is defeated, this study proposes policy recommendations to cope with the current oil price crash. Elsevier B.V. 2021-12 2021-07-01 /pmc/articles/PMC9756000/ /pubmed/36540339 http://dx.doi.org/10.1016/j.ribaf.2021.101489 Text en © 2021 Elsevier B.V. All rights reserved. Since January 2020 Elsevier has created a COVID-19 resource centre with free information in English and Mandarin on the novel coronavirus COVID-19. The COVID-19 resource centre is hosted on Elsevier Connect, the company's public news and information website. Elsevier hereby grants permission to make all its COVID-19-related research that is available on the COVID-19 resource centre - including this research content - immediately available in PubMed Central and other publicly funded repositories, such as the WHO COVID database with rights for unrestricted research re-use and analyses in any form or by any means with acknowledgement of the original source. These permissions are granted for free by Elsevier for as long as the COVID-19 resource centre remains active. |
spellingShingle | Article Le, Thai-Ha Le, Anh Tu Le, Ha-Chi The historic oil price fluctuation during the Covid-19 pandemic: What are the causes? |
title | The historic oil price fluctuation during the Covid-19 pandemic: What are the causes? |
title_full | The historic oil price fluctuation during the Covid-19 pandemic: What are the causes? |
title_fullStr | The historic oil price fluctuation during the Covid-19 pandemic: What are the causes? |
title_full_unstemmed | The historic oil price fluctuation during the Covid-19 pandemic: What are the causes? |
title_short | The historic oil price fluctuation during the Covid-19 pandemic: What are the causes? |
title_sort | historic oil price fluctuation during the covid-19 pandemic: what are the causes? |
topic | Article |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9756000/ https://www.ncbi.nlm.nih.gov/pubmed/36540339 http://dx.doi.org/10.1016/j.ribaf.2021.101489 |
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