Does OPEC news sentiment influence stock returns of energy firms in the United States?
Kartick Gupta and
Energy Economics, 2019, vol. 77, issue C, 34-45
This paper utilises commodity-specific news sentiment data on the Organisation of Petroleum Exporting Countries (OPEC) collected from Thomson Reuters News Analytics in the period 2003–2014 and examines the impact of foreign news sentiment on the financial performance of domestic firms in the energy sector. We find that in the US market, negative news on OPEC positively influences the stock returns of the US-listed firms. The effects of negative news sentiment on OPEC dominate our results. These results are robust in different subsectors of the oil and gas industry and in alternative specifications of oil prices and market volatility. We show that the effect is conditional on market risks and the types of news announcements made. The effect from negative news is stronger in periods of higher reserves, exports and production. However, at times of low consumer confidence and high imports, a positive OPEC news announcement negatively influences a US-listed energy firm's stock return. In the context of hedging and risk mitigation, our findings have important policy implications for investors and traders in the energy sector.
Keywords: OPEC; News sentiment; Stock returns; Commodity prices; Energy sector (search for similar items in EconPapers)
JEL-codes: G12 G15 Q40 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:77:y:2019:i:c:p:34-45
Access Statistics for this article
Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant
More articles in Energy Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().