Brent–Dubai oil spread: Basic drivers
Date
2021-12
Editor(s)
Advisor
Supervisor
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Co-Supervisor
Instructor
Source Title
Economic Analysis and Policy
Print ISSN
0313-5926
Electronic ISSN
Publisher
Economic Society of Australia Inc.
Volume
72
Issue
Pages
492 - 505
Language
English
Type
Journal Title
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Abstract
This study aims to assess and quantify the effects of potential economic drivers on the Brent–Dubai price spread using the time-dependent Kalman filtering technique. To understand the pricing mechanism of crude oils, it is necessary to distinguish the driving forces of the world oil market. The Brent–Dubai price spread is selected as a global indicator representing trends in world oil trade and global economic activities. The estimates suggest that the global economic activities represented by the world trade index, world oil demand, world steel production, the number of world airline passengers and regional dynamics proxied by the growth rate of China over the US and the Euro Area have explanatory power on the Brent–Dubai spread.