Coronavirus and Oil Price Crash

By Claudiu Tiberiu Albulescu. Social Science Research Network, 2020

161 citations recorded by the source corpus.

Coronavirus (COVID-19) creates fear and uncertainty, hitting the global economy and amplifying the financial markets volatility. The oil price reaction to COVID-19 was gradually accommodated until March 09, 2020, when, 49 days after the release of the first coronavirus monitoring report by the World Health Organization (WHO), Saudi Arabia floods the market with oil. As a result, international prices drop with more than 20% in one single day. Against this background, the purpose of this paper is to investigate the impact of COVID-19 numbers on crude oil prices, while controlling for the impact of financial volatility and the United States (US) economic policy uncertainty. Our ARDL estimation shows that the COVID-19 daily reported cases of new infections have a marginal negative impact on the crude oil prices in the long run. Nevertheless, by amplifying the financial markets volatility, COVID-19 also has an indirect effect on the recent dynamics of crude oil prices.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/cf46c73cf740fcadf33e8ab95dc78f5a8bafd6e5

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In Economics and Econometrics

1. M. Monge
2. Ł. Sułkowski
3. L. Gil‐Alana
4. Fredj Jawadi
5. Paresh Kumar Narayan
6. B. N. Iyke
7. Gang Li
8. Haiyan Song

Citations in the corpus

• Covid-19 Pandemic; Recession, Virtual Revolution Leading to De-globalization? (2020, background): “Trade, financial, banking and insurance sectors as well as fuel extraction and processing, and many other activities are also sensitive (Albulescu, 2020b).”
• Oil price volatility in the context of Covid-19 (2021, background): “Albulescu (2020) also showed that statements about the spread of coronavirus drove oil price volatility.”
• Does COVID-19 open a Pandora's box of changing the connectedness in energy commodities? (2020, unknown): “Recently, the energy commodity and even the whole financial market have exhibited many strange phenomena, such as extremely high price volatility, negative crude oil prices, and rapidly rising systemic risks (Albulescu, 2020).”
• Crude Oil Prices and COVID-19: Persistence of the Shock (2020, background): “However, several recent studies show the impact of COVID-19 on commodity markets (see, e.g., Albulescu, 2020; Bakas & Triantafyllou, 2020, among others).”