On the vulnerability of the oil and gas industry to oil price changes |
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Authors: | Williams O Olatubi Sung C No |
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Institution: | (1) Louisiana State University, USA;(2) Southern University, USA |
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Abstract: | Previous studies of oil-price economic activity relationships are dominated by macro-level examination of price effects. This
study examines the effect of shocks in oil price and its volatility on the oil and gas extraction industry using a Vector
Auto-Regressive (VAR) approach. The results show that, in the short-run, positive price and volatility shocks lead to significant
increases in oil and gas activities. However, in the long-run, the industry behaves much like the rest of the U.S. economy—price
and volatility shocks produce small or insignificant effects.
An earlier version of this paper was presented at the 22
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Annual North American Conference of the U.S.A. Energy Economics/International Association of Energy Economics Conference,
Vancouver, British Columbia. The authors acknowledge the editorial assistance of Versa Stickle. |
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Keywords: | |
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