Crude oil price volatility and energy mix in Saudi Arabia

Wada, Ikuo; Tuna, Gülcay

doi:10.1080/15567249.2016.1222027

Cited by 8 publications

(7 citation statements)

References 9 publications

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“…By employing the housing and the energy sectors of the KSA (against three‐sector analysis of Wada & Tuna, 2017), this study investigates the evidence of price bubbles and the implication of volatility of crude oil price movements and the dynamic global factor in Saudi Arabia. The study uses the daily Saudi Arabia real estate price 1 (Al Akaria, measured in SAR) as a proxy for the housing market.…”

Section: Data and Estimation Methodologymentioning

confidence: 99%

“…Additionally, studies of the linkages between oil price dynamics, shocks in commodity markets, microeconomic variables and energy mix in Saudi Arabia has been widely reported (Wada & Tuna, 2017). The work of Wada and Tuna (2017) engaged the Markov switching regression model to investigate the volatility trends of international crude oil price as it relates to the energy mix of Saudi Arabia's in a three‐sectoral framework. It noted that electric power generation from direct burning of crude oil in Saudi Arabia have negative impact on the industrial production but also not without significant cost and environmental implications.…”

Section: Related Literaturementioning

confidence: 99%

“…The insight from the study of the housing market and consumption (Simo‐Kengne, Miller, Gupta, & Aye, 2015) and the housing‐energy market dynamics study of Baumont (2018) are insightful perspective about the current study. Similarly, by incorporating the Saudi Arabia energy and the Markov switch framework idea of Wada and Tuna (2017) and the volatility approach of Raju and Jayaraj (2018), the current study presents a related approach. Objectively, the evidence of speculative bubbles is investigated for each of the examined market vis‐à‐vis the crude oil market and the real estate market.…”

Section: Introductionmentioning

confidence: 99%

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Evidence of speculative bubbles and regime switch in real estate market and crude oil price: Insight from Saudi Arabia

Alola

2020

Int. J Fin Econ

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The sector performances of many economies especially the oil‐producing ones, are consistently linked with the volatility of the international crude oil prices. Considering the significance of the international crude oil price to the economy of the Saudi Arabia, the current study investigates the dynamics of the crude oil price and the country's real estate market. This is achieved by investigating the evidence of both speculative bubbles and regime switching in the crude oil and real estate market from October 3, 2005, to March 29, 2018. As such, the Supremum Augmented Dickey–Fuller (SADF) and Markov switching regression model were employed. Although there is no significant evidence of speculative bubbles in the Saudi Arabia's real estate market, the result reveals statistical significant evidence of price bubbles in the Brent crude oil price especially between the period of 2007 to 2008, which coincides with the Global Financial Crisis period. However, the Markov switching investigation reveal that there is evidence of significant and positive impact of crude oil price return on the real estate market in the regimes. Importantly, empirical evidence shows that the impact is higher in Regime 2 even as the global factor (proxy volatility index) is evidently significant. Although the regimes are persistent, the expected regime duration of the stable regime is of the higher quarter. This investigation is statistically significant and robust, especially when Organization of the Petroleum Exporting Countries (OPEC) price of crude oil is used in lieu of the European Brent price. The estimation result encourages more strict energy policies that tackle the Saudi Arabia's energy and the real estate challenges.

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Section: Data and Estimation Methodologymentioning

confidence: 99%

Section: Related Literaturementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Evidence of speculative bubbles and regime switch in real estate market and crude oil price: Insight from Saudi Arabia

Alola

2020

Int. J Fin Econ

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“…Based on only housing sector (against three‐sector analysis of Wada & Tuna, 2017), we investigate the implication of volatility of crude oil price movements and the dynamic global factor in Saudi Arabia. The study uses the daily Saudi Arabia real estate price 1 (Al Akaria, measured in SAR) as a proxy for the housing market.…”

Section: Data and Estimation Methodologymentioning

confidence: 99%

“…The result of the wavelet study analysis implies that KSA remains at the risk of global risk factors that are associated with the oil market volatility and the operation of the fixed exchange rate policy. Additionally, studies of the linkages between oil price dynamics, shocks in commodity markets, microeconomic variables, and energy mix in Saudi Arabia has been widely reported (Wada & Tuna, 2017). The work of Wada and Tuna (2017) engaged the Markov switching regression model to investigate the volatility trends of International crude oil price as it relates to the energy mix of Saudi Arabia's in a three‐sectoral framework.…”

Section: Energy Market Dynamicsmentioning

confidence: 99%

The dynamics of crude oil price and the real estate market in Saudi Arabia: A Markov‐switching approach

Alola

2020

Journal of Public Affairs

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The volatility evidence of the International crude oil prices has overtime been linked to the dynamics and sector performances of states' economies. By employing the Markov switching regression model over daily time series data from October 3, 2005 to March 29, 2018, this study examines the response of the Saudi Arabia real estate market to the crude oil price dynamics. An empirical observation revealed that there is statistical evidence of significant and positive impact of crude oil price return on the real estate market in the regimes. Am empirical evidence shows that the impact is higher in Regime 2 even as the global factor (proxied by volatility index) is evidently significant. Although the regimes are persistent, the expected regime duration of the stable regime is of the higher quarter. This investigation is statistically significant and robust, especially when OPEC price of crude oil is used in lieu of the Europe Brent price. By a further estimation techniques, it affirms that the model exhibits nonlinearity rather than a linear relationship. The estimation result encourages more strict energy policies such as the implementetion of energy diversification policy among others, thus rendering a panacea to Saudi Arabia's energy and the real estate challenges.

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Dynamics of total and industrial energy use in Turkiye from 1991 to 2019: a case study

Rüstemoğlu

2024

Environ Dev Sustain

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Energy use is an indicator of economic growth. However, high energy intensity has two main disadvantages. First, low energy efficiency increases a country’s dependence on other countries, especially when the country lacks energy sources. Second, if the country’s energy needs are met using traditional fossil fuels, this increases its CO2 emissions and reduces its air quality. Improving energy efficiency and reducing energy intensity are essential to reach the sustainability targets. This paper investigates the determinants of energy use in Turkiye for the period 1991–2019 by taking a dual approach. First, utilizing the Tapio decoupling factor, the decoupling factor analysis is not only being done for total energy use and real GDP, but also for industrial energy use and industrial income. Second, the factors determining the country’s total energy use are also examined, followed by an investigation of the indicators of energy use in the industry sector, which is highly energy intensive. For the industrial sector, two different decomposition analyses are performed and results are compared. The refined Laspeyres index method is adopted, and for each analysis, three main factors are considered. The empirical findings demonstrate that the income effect and population effect increased Turkiye’s total energy use, whereas the energy intensity effect decreased it. The first decomposition analysis for the industrial energy use reveals partly contrasting results with the previously published articles. For the industry sector, the second analysis show that productivity and employment increased Turkiye’s sectoral energy use; however, the sector’s energy intensity reduced it. Turkiye achieved some success in terms of reducing energy intensity at the sectoral and aggregate levels; however, as the findings of the present study demonstrate, further efforts are needed to lessen the country’s energy dependence and also to achieve future environmental sustainability targets. Trends relating to the determining factors in total and sectoral energy use are also compared in this paper, and some policy implications are presented.

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Crude oil price volatility and energy mix in Saudi Arabia

Cited by 8 publications

References 9 publications

Evidence of speculative bubbles and regime switch in real estate market and crude oil price: Insight from Saudi Arabia

Evidence of speculative bubbles and regime switch in real estate market and crude oil price: Insight from Saudi Arabia

The dynamics of crude oil price and the real estate market in Saudi Arabia: A Markov‐switching approach

Dynamics of total and industrial energy use in Turkiye from 1991 to 2019: a case study

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