 Forecasting crude oil prices with global ocean temperaturesMengxi He, Zhikai Zhang and Yaojie Zhang Energy, 2024, vol. 311, issue C Abstract: This paper explores the role of ocean temperature (OT) in forecasting crude oil prices. Global OT shows statistically and economically significant predictive power, with corresponding in-sample and out-of-sample R2s of 1.81 % and 1.74 %, respectively. Both southern and northern hemisphere OTs can predict future oil prices, and the former is more predictive. Compared to the Atlantic, OTs in the Indian and Pacific Oceans display considerable predictive gains. In addition, we find that OTs have stronger forecasting power for crude oil prices in the recent period, with the in-sample R2 of global OT for the recent decade's sample reaching as high as 2.74 %. Correspondingly, we find that OTs' predictive power in the full sample can be explained through two channels: market risk and investor attention. In the recent period, in addition to these two channels, OTs have also influenced crude oil prices through the oil fundamental channel. Keywords: Ocean temperature; Oil price predictability; Oil market risk; Investor attention; Placebo analysis (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:311:y:2024:i:c:s0360544224031177 DOI: 10.1016/j.energy.2024.133341 Access Statistics for this article Energy is currently edited by Henrik Lund and Mark J. Kaiser More articles in Energy from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.