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Constructing a Composite Leading Indicator for the Global Crude Oil Price

Author

Listed:
  • Mei-Teing Chong
  • Chin-Hong Puah
  • Shazali Abu Mansor

Abstract

Crude oil, as the most traded commodity in the world, exhibits prices with a clear influence on other commodities in the worldwide market. It also poses implications regarding the economic growth of oil-exporting and oil-importing nations. This study provides an unprecedented method of employing the indicator approach as proposed by the Conference Board, National Bureau of Economic Research, to construct a leading indicator for the global crude oil price. The results reveal that the constructed oil price indicator can predict the cyclical movement of the oil price by moving in advance of 3.5 months on average. This finding could provide better signaling to oil-related nations as well as other commodities that consider crude oil to be a leader in the market.

Suggested Citation

  • Mei-Teing Chong & Chin-Hong Puah & Shazali Abu Mansor, 2018. "Constructing a Composite Leading Indicator for the Global Crude Oil Price," International Business Research, Canadian Center of Science and Education, vol. 11(5), pages 129-134, May.
    • Handle: RePEc:ibn:ibrjnl:v:11:y:2018:i:5:p:129-134
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    References listed on IDEAS

    as
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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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