Economics, Econometrics and Finance
6 years ago

Oil market dynamics create risks and opportunities for global participants.

OPEC Energy Review
The physical market and the WTI/Brent price spread
Pan Liu, Reid Stevens, Dmitry V. Vedenov

Paper Summary

The WTI/Brent price spread has shown significant variations since 2010, despite similar quality and purposes of the oils. The study analyzed data from 1994 to 2016 and found a shift in the spread from stable to fluctuating in 2010. This change was confirmed by statistical tests. The main driver of the spread was US production shocks, impacting the dynamics of oil prices.

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