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The analyses of Crude Oil and Natural Gas Prices on Petrochemicals Products: A Case Study of IRAN's Methanol

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  • Delavari, Majid
  • Gandali Alikhani, Nadiya
  • Naderi, Esmaeil

Abstract

Examining energy as a strategic commodity in the world and analysis of the effect of changes in its price on key economic factors has been always considered as significant. The importance of this issue is twofold in Iran: first, policies in this country, as one of the great possessors of energy resources in the world, affects not only the price of domestic and foreign oil products but also other economic variables. On the other hand, for different reasons such as oil price volatilities and income from oil export, economic planners and policy makers in Iran have been mainly focused on the promotion of non-oil exports especially during the last few decades. Therefore, methanol as one of the most commonly used petrochemical products has a high potential for production and export of non-oil products in Iran. For this reason, in the present study there was an attempt to examine the relationship between the prices of Iran’s crude oil, natural gas, and methanol using IGARCH model and based on the weekly time series data related to the research variables. The results of the study showed that the shocks caused by the price of crude oil and natural gas to the price of methanol were lasting and meaningful and were revealed in the long term.

Suggested Citation

  • Delavari, Majid & Gandali Alikhani, Nadiya & Naderi, Esmaeil, 2012. "The analyses of Crude Oil and Natural Gas Prices on Petrochemicals Products: A Case Study of IRAN's Methanol," MPRA Paper 48788, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:48788
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    1. Delavari, Majid & Baranpour, Naghmeh & Abdeshahi, Abbas, 2014. "Analyzing the Effect of Real Exchange Rate on Petrochemicals Exporting," MPRA Paper 60360, University Library of Munich, Germany.

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    More about this item

    Keywords

    Methanol Price; Natural Gas Price; Crude Oil Price; IGARCH Model.;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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