Do Global Crude Oil Markets Behave as One Great Pool? A Cyclical Analysis

Niyati Bhanja (), Arif Dar and Aviral Tiwari

Journal of Business Cycle Research, 2018, vol. 14, issue 2, No 2, 219-241

Abstract: Abstract In energy economics literature, the controversial assertion of whether crude oil markets are regionalized (Weiner in Energy J 12:95–107, 1991) or behave as one unified entity (Adelman in Energy J 5(3):1–9, 1984) is still an unsettled debate. While the proponents of globalization hypothesis trust that the crude oil markets behave as one big pool, the advocates of regionalization believe that they are segmented. To settle this debate, we tested the globalization–regionalization hypothesis by estimating the wavelet coherence, multiple correlation, cross-correlation, and club convergence at different time horizons. The results suggest that the crude oil markets remain synced over longer time horizons, thereby reaffirming the globalization argument. However, at shorter time horizons, they behave rather independently and are hence mostly regionalized.

Keywords: Crude oil; Globalization; Regionalization (search for similar items in EconPapers)
JEL-codes: F21 F41 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (5)

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DOI: 10.1007/s41549-018-0028-y

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