Evaluating the Behavioral Pattern of OPEC Organization on the Price of Crude Oil According to the Analysis of the Event Approach

Document Type : Scientific paper

Authors

1 PhD student, Department of Economics, Faculty of Economics &Accounting, Islamic Azad University of Central Tehran Branch, Tehran, Iran

2 Assistant professor, Department of Economics, Faculty of Economics and Accounting, Islamic Azad University, Tehran, Iran

3 Assistant professor, Department of Economics, Faculty of Economics &; Accounting, Islamic Azad University of Central Tehran Branch, Tehran, Iran

4 Assistant professor, Department of Economics,, Faculty of Economics &Accounting, Islamic Azad University of Central Tehran Branch, Tehran, Iran

Abstract

One of the factors affecting oil prices is related to OPEC's behavioral pattern concerning its position and share in the world oil supply. In this regard, the impact of OPEC's decisions and announcement on the level of crude oil production has been identified as a controversial issue among policymakers, producers, and researchers so that it can inevitably affect the price of this product in world markets. In view of that, the main purpose of the present study to scrutinize the impact of the type of announcement made by the OPEC (including Increased, Cut, or unchanged) on Brent's and WTI's global crude oil returns over the period 1987 to 2019 based on the event study approach. Furthermore, the central aspect and innovation of this research, which makes it different from other studies in this area, is mostly associated with the influence of OPEC's statements on crude oil prices based on the event study and the use of three contemporary approaches in calculating abnormal returns. It is concluded the results indicate a different reaction from the crude oil market to OPEC's statement. Likewise, the outcomes obtained from the current study feature that OPEC has been less influential on the crude oil market over recent years.



Keywords

References

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Macroeconomics Research Letter
Volume 15, Issue 29
August 2020
Pages 323-347

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History

  • Receive Date: 03 October 2019
  • Revise Date: 07 December 2020
  • Accept Date: 20 December 2020

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