The topic of skyrocketing gasoline prices seems to be making
headlines all over the news these past few months. I am very interested in what
or who is causing these record highs and recently I have been collecting
empirical data pertaining to the factors that effect the direction of crude
oil.
Although
most of the price of crude is due to speculation and futures markets, there are
still other factors that contribute to price fluctuations. A few of these
factors include the following: OPEC production levels, non-OPEC production
levels and whether wars are being fought. The data I have collected obtains the
production levels of OPEC and non-OPEC countries the last forty years as well
as the historical nominal prices, prices adjusted to inflation and the GDP
deflator measurement.
What
I am looking for is if the levels of production of non-OPEC compared to the
levels of OPEC have a statistically significant effect on the price of crude
oil. The results I have found are not surprising, I found that when non-OPEC
production levels exceed a certain amount the price of oil has decreased.
I’ve
found this topic to be very interesting and I know there is a lot more I can do
to get even better regression results.
