Brent–Dubai oil spread: Basic drivers

Ebru Yuksel Haliloglu, Serkan Sahin and M. Hakan Berument

Economic Analysis and Policy, 2021, vol. 72, issue C, 492-505

Abstract: This study aims to assess and quantify the effects of potential economic drivers on the Brent–Dubai price spread using the time-dependent Kalman filtering technique. To understand the pricing mechanism of crude oils, it is necessary to distinguish the driving forces of the world oil market. The Brent–Dubai price spread is selected as a global indicator representing trends in world oil trade and global economic activities. The estimates suggest that the global economic activities represented by the world trade index, world oil demand, world steel production, the number of world airline passengers and regional dynamics proxied by the growth rate of China over the US and the Euro Area have explanatory power on the Brent–Dubai spread.

Keywords: Brent–Dubai oil spread; Growth of China; Kalman filter; Oil demand; Trade index (search for similar items in EconPapers)
JEL-codes: C51 G14 Q41 Q43 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:72:y:2021:i:c:p:492-505

DOI: 10.1016/j.eap.2021.09.014

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