The effect of global activities and warming on oil price

Chin Ho Cho, Li Jiun Yang, Yun Peng Chu, Tuan Yuen Kong

Research output: Contribution to journalArticle

Abstract

In this article, we have attempted to examine the relationships among the crude oil price, global activities index, and global temperature, as well as the exchange rate over the period from January 1982 to December 2009, using the empirical mode decomposition, autoregressive-distributed lag and threshold regression approach. The results indicate that the long-run elasticity of the oil price in relation to global activities is found to be 0.559, which is lower than the finding of He et al. (2010). These results are possibly due to recent improvements in technology that have led to a reduction in demand for crude oil as global activities increase. Furthermore, we have found that global warming will help to reduce the oil price as the global temperature remains below the threshold value. However, after it exceeds the threshold value, as the global temperature continues to rise, it will have no effect in terms of reducing the oil price.

Original languageEnglish
Pages (from-to)274-281
Number of pages8
JournalEnergy Sources, Part B: Economics, Planning and Policy
Volume11
Issue number3
DOIs
Publication statusPublished - Mar 3 2016
Externally publishedYes

Fingerprint

Oils
warming
Petroleum
oil
Crude oil
crude oil
Global warming
Temperature
temperature
Elasticity
exchange rate
elasticity
Decomposition
global warming
decomposition
effect
price
threshold value

Keywords

  • Autorgressive distributed lag model
  • crude oil price
  • empirical mode decomposition
  • global activities
  • global temperature
  • threshold regression

ASJC Scopus subject areas

  • Chemical Engineering(all)
  • Energy Engineering and Power Technology
  • Fuel Technology
  • Nuclear Energy and Engineering
  • Renewable Energy, Sustainability and the Environment
  • Environmental Science(all)

Cite this

The effect of global activities and warming on oil price. / Cho, Chin Ho; Yang, Li Jiun; Chu, Yun Peng; Kong, Tuan Yuen.

In: Energy Sources, Part B: Economics, Planning and Policy, Vol. 11, No. 3, 03.03.2016, p. 274-281.

Research output: Contribution to journalArticle

Cho, Chin Ho ; Yang, Li Jiun ; Chu, Yun Peng ; Kong, Tuan Yuen. / The effect of global activities and warming on oil price. In: Energy Sources, Part B: Economics, Planning and Policy. 2016 ; Vol. 11, No. 3. pp. 274-281.
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