Munich Personal RePEc Archive

The macroeconomic effects of oil supply news: Evidence from OPEC announcements

Känzig, Diego Raoul (2020): The macroeconomic effects of oil supply news: Evidence from OPEC announcements. Forthcoming in:

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Abstract

This paper studies how changes in oil supply expectations affect the oil price and the macroeconomy. Using a novel identification design, exploiting institutional features of OPEC and high-frequency data, I identify an oil supply news shock. These shocks have statistically and economically significant effects. Negative news leads to an immediate increase in oil prices, a gradual fall in oil production and an increase in inventories. This has consequences for the U.S. economy: activity falls, prices and inflation expectations rise, and the dollar depreciates—providing evidence for a strong channel operating through supply expectations.

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