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Does Crude Oil Production Respond Differently to Oil Supply and Demand Shocks? Evidence from Alaska

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  • Jungho Baek

    (Department of Economics, College of Business and Security Management, University of Alaska, Fairbanks, AK 99775, USA)

Abstract

The paper conducts extensive research on how Alaska’s oil production is affected by shocks in oil supply, aggregate demand, and oil-specific demand under both symmetric and asymmetric scenarios. We demonstrate that employing an empirical model with the inclusion of an asymmetric assumption provides a more suitable approach for comprehensively understanding the short and long-term impacts of various oil shocks on Alaska’s oil production. We also find that Alaska’s oil production is significantly affected by oil supply and aggregate demand shocks over both short and long periods, whereas oil-specific demand shocks have a minimal impact. Finally, our research identifies asymmetric effects in the long term, particularly concerning the influence of aggregate demand and oil-specific demand shocks on Alaska’s oil production. However, no asymmetric effects are observed for the three oil shocks in the short term.

Suggested Citation

  • Jungho Baek, 2024. "Does Crude Oil Production Respond Differently to Oil Supply and Demand Shocks? Evidence from Alaska," Commodities, MDPI, vol. 3(1), pages 1-13, February.
    • Handle: RePEc:gam:jcommo:v:3:y:2024:i:1:p:5-74:d:1336889
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    References listed on IDEAS

    as
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    Keywords

    Alaska; ARDL; oil shocks; symmetry;
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