Reasons Behind Words: OPEC Narratives and the Oil Market

Valérie Mignon (), Celso Brunetti and Marc Joëts

No 2023-24, EconomiX Working Papers from University of Paris Nanterre, EconomiX

Abstract: We analyze the content of the Organization of the Petroleum Exporting Countries (OPEC) communications and whether it provides valuable information to the crude oil market. To this end, we derive an empirical strategy which allows us to measure OPEC’s public signal and test its credibility. Using Structural Topic Models, we identify several topics in OPEC narratives. We show that these topics are related to fundamental factors such as demand, supply, and speculative activity in the crude oil market, highlighting that OPEC narratives are highly linked to oil market volatility and traders’ positions. We also find that OPEC communication is credible, reduces oil price volatility, and prompts market participants to rebalance their positions.

Keywords: OPEC Announcements; Structural Topic Models; Volatility; Traders’ Positions (search for similar items in EconPapers)
JEL-codes: C45 C50 G10 Q35 Q40 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2023
New Economics Papers: this item is included in nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://economix.fr/pdf/dt/2023/WP_EcoX_2023-24.pdf (application/pdf)

Related works:
Working Paper: Reasons Behind Words: OPEC Narratives and the Oil Market (2024)
Working Paper: Reasons Behind Words: OPEC Narratives and the Oil Market (2023)
Working Paper: Reasons Behind Words: OPEC Narratives and the Oil Market (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2023-24

Access Statistics for this paper

More papers in EconomiX Working Papers from University of Paris Nanterre, EconomiX Contact information at EDIRC.
Bibliographic data for series maintained by Valerie Mignon ( this e-mail address is bad, please contact ).