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The U.S. Dollar Exchange Rate and the Demand for Oil

  • Selien De Schryder
  • Gert Peersman

Using recent advances in panel data estimation techniques, we find that an appreciation of the US dollar exchange rate leads to a significant decline in oil demand for a sample of 65 oil-importing countries. The estimated effect turns out to be much larger than the impact of a shift in the global crude oil price expressed in US dollar. Furthermore, the effect of the US dollar on oil demand tends to be declining over time and, for a subsample of OECD countries, stronger for an appreciation compared to a depreciation of the US dollar.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4126.

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Date of creation: 2013
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Handle: RePEc:ces:ceswps:_4126
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