How to 'Trump' the energy market: evidence from the WTI-Brent spread

Catalin Dragomirescu-Gaina, Dionisis Philippas and Stéphane Goutte

Working Papers from HAL

Abstract: Donald Trump's use of Twitter was unprecedented. Despite his erratic communication style, some of Trump's strong statements were made in reference to the U.S. oil & gas industry, in line with his domestic policy agenda aimed at supporting re-industrialization and local investment. Did his Twitter messages actually reach domestic oil producers, refiners and transport operators or rather speculators willing to financially gamble on new information sources? To address this question, we model the WTI-Brent spread, which commonly reflects supply bottlenecks in the U.S. crude oil sector, using a nonlinear approach that reveals the perverse influence of some of Trump's tweets particularly on market speculative dynamics. Finally, we outline policy recommendations to counteract the market consequences of speculative behaviour driven by political noise.

Keywords: WTI-Brent spread; Twitter; speculation (search for similar items in EconPapers)
Date: 2022-11-08
New Economics Papers: this item is included in nep-ene
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03843257v1
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Journal Article: How to ‘Trump’ the energy market: Evidence from the WTI-Brent spread (2023)
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