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Petroleum products price interactions on the world markets : an econometric analysis

Author

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  • Laetitia de Maack

    (IFPEN - IFP Energies nouvelles, CREDEN - Centre de Recherche en Economie et Droit de l'ENergie - UM1 - Université Montpellier 1)

  • Frédéric Lantz

    (IFPEN - IFP Energies nouvelles)

Abstract

This study examines the relationship between crude oil ans petroleum products prices in the European, Asian and North American markets. We develop an econometric model, based on the long term equilibrium between the prices, which takes into account the changes in the oil product demand trends. We explain price behaviors by the impact of the demand trends. Because the refining industry which transforms crude into petroleum products is a joint product industry, petroleum product pricing is affected by demand trends both in terms of quality and quantity. Consequently, the long term equilibrium between prices, estimated through a cointegration approach, are affected by several structural breaks. We also develop a panel econometric model which simultaneously takes into account the relative prices of all world products towards one crude. Finally, the different results are compared to the marginal costs derived from an oil refining optimization model. This econometric modeling approach enables a better understanding of the long terme equilibrium between prices of petroleum products and crude.

Suggested Citation

  • Laetitia de Maack & Frédéric Lantz, 2012. "Petroleum products price interactions on the world markets : an econometric analysis," Working Papers hal-03206442, HAL.
    • Handle: RePEc:hal:wpaper:hal-03206442
    Note: View the original document on HAL open archive server: https://ifp.hal.science/hal-03206442
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    Citations

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    Cited by:

    1. Anthony Paris, 2016. "The Effect of Biofuels on the Link between Oil and Agricultural Commodity Prices: A Smooth Transition Cointegration Approach," EconomiX Working Papers 2016-5, University of Paris Nanterre, EconomiX.
    2. Dupoux, Marion, 2019. "The land use change time-accounting failure," Ecological Economics, Elsevier, vol. 164(C), pages 1-1.
    3. Emmanuel Hache, 2018. "Do renewable energies improve energy security in the long run?," International Economics, CEPII research center, issue 156, pages 127-135.
    4. Albert Banal-Estañol & Jeremy Eckhause & Olivier Massol, 2015. "Incentives for early adoption of carbon capture technology: further considerations from a European perspective," Working Papers hal-02475485, HAL.
    5. Vincent Brémond & Emmanuel Hache & Tovonony Razafindrabe, 2015. "On the link between oil price and exchange rate : A time-varying VAR parameter approach," Working Papers hal-03206684, HAL.

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