Why are crude oil prices high when global activity is weak?

Ratti, Ronald A and Vespignani, Joaquin L. (2012): Why are crude oil prices high when global activity is weak?

Abstract

There have been substantial increases in liquidity in recent years and real oil prices have almost returned to the high levels achieved before the Global financial crisis. Unanticipated increases in global real M2 lead to statistically significant increases in real oil prices. The cumulative impact of global real M2 on the real price of crude oil is important in the recovery of oil price over 2009 to 2011.

• Item Type: MPRA Paper
• Language: English
• Keywords: Keywords: Oil Price, Global Liquidity
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q41 - Demand and Supply ; Prices; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q43 - Energy and the Macroeconomy

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