Oil prices and the natural gas liquids markets

Green Finance

Ali Jadidzadeh¹  Apostolos Serletis² 

[1] 1. Department of Economics, University of Tehran, Tehran, Iran 2. The School of Public Policy, University of Calgary, Calgary, Alberta, Canada;3. Department of Economics, University of Calgary, Calgary, Alberta, T2N 1N4, Canada;

关键词: oil price shocks;    structural var;    natural gas liquids;   

DOI  :  10.3934/GF.2022010

来源: DOAJ

【 摘 要 】

This paper investigates the impact of oil market structural shocks on the prices of natural gas liquids (NGLs), including ethane, propane, normal butane, isobutane, and natural gasoline, over the period from January 1985 to April 2020. To identify the structural demand and supply shocks in the crude oil market, we use a vector autoregression model and assume that the innovations to the real price of crude oil are predetermined with respect to the local NGLs markets. Our results show that, in the long run, more than 55% of the variation in the real price of NGLs is explained by the structural shocks in the global crude oil market. We also find that, unlike oil supply shocks, demand-side shocks have permanent and persistent impacts on NGLs' real prices and should be of main concern to investors aiming to develop gas wells and NGLs producing technologies.

【 授权许可】

Unknown