How do mobility restrictions and social distancing during COVID-19 affect oil price?

Abstract

This paper provides an analysis of the effect of the COVID-19 outbreak on the crude oil price. Using a newly developed air mobility index and Apple’s driving trends index, we assess the effect of human mobility restrictions and social distancing during the COVID-19 pandemic on the crude oil price. We apply a quantile regression model, which evaluates different quantiles of the crude oil price. We also conduct an extreme value modeling, which examines the lower tail of the crude oil price distribution. We find that both the air mobility index and driving trends index significantly influence lower and upper quantiles of the WTI crude oil price. The extreme value models suggest that there is a potential risk of a negative crude oil price for a sudden extreme fall of air mobility.

The Apple Mobility Trends Data in Human Mobility Patterns during Restrictions and Prediction of COVID-19: A Systematic Review and Meta-Analysis

“…Based on the four exclusion criteria, 16 reports were excluded. One report had no COVID-19 context [ 36 ], four did not point to the geographical region where it was conducted [ 37 , 38 , 39 , 40 ], eight studies did not describe how the mobility data was used [ 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 ], and three were not relevant [ 49 ]. Thirty-five reports were left in the review.…”

Forecasting stock indices with the COVID-19 infection rate as an exogenous variable

“…The statistical analysis of the stock market index is critically important to explore the impact of confirmed cases of COVID-19 on the overall stock price index. Dey & Das (2022) provided an analysis of the effect of the COVID-19 outbreak on the crude oil price. A very recent analysis revealed the volatility spillovers and co-movements among energy-producing, extracting, and transporting corporations’ stock prices and evaluate how the COVID-19 pandemic creates negative WTI oil prices ( Corbet, Goodell & Günay, 2020 ).…”