Crude oil price: Demand, supply, economic activity, economic policy uncertainty and wars: from the perspective of structural equation modelling (SEM)

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Wang, Qingfeng and Sun, Xu (2017) Crude oil price: Demand, supply, economic activity, economic policy uncertainty and wars: from the perspective of structural equation modelling (SEM). Energy, 133 . pp. 483-490. ISSN 0360-5442

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Official URL: https://www.sciencedirect.com/science/article/pii/S0360544217309192?via%3Dihub

Abstract

We studied the relationship between the change in the price of oil and some of its determinants, using a structural equation model. The demand for oil is confirmed to be inelastic to the change in oil price during our sampling period. Economic activity is found to be the most significant factor in explaining the dynamics of oil price. Wars and political tension, among the largest oil producers and their neighbouring countries, can drive the crude oil price sharply higher, but no significant direct effect was confirmed by the SEM. The significant effects of wars and political tension on the price of oil lies in their ability to disrupt oil supplies.

Item Type:	Article
RIS ID:	https://nottingham-repository.worktribe.com/output/878115
Keywords:	Crude oil price; Wars; Economic policy uncertainty; Kilian economic index; Structural equation modelling
Schools/Departments:	University of Nottingham Ningbo China > Faculty of Business > Nottingham University Business School China University of Nottingham Ningbo China > Faculty of Science and Engineering > Department of Mechanical, Materials and Manufacturing Engineering
Identification Number:	10.1016/j.energy.2017.05.147
Depositing User:	Yu, Tiffany
Date Deposited:	25 May 2018 08:25
Last Modified:	04 May 2020 19:01
URI:	https://eprints.nottingham.ac.uk/id/eprint/51999

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