Crude Oil Price and Stock Markets in Major Oil-Exporting Countries: Evidence of Decoupling Feature

International Journal of Monetary Economics and Finance, Vol. 5, No. 1, 2012

10 Pages Posted: 14 Nov 2012

Date Written: November 13, 2012

Abstract

This paper investigates common cyclical feature between crude oil market and stock markets in major oil-exporting countries including Saudi Arabia, United Arab Emirates (UAE) and Kuwait. The results of the paper show the evidence of common cyclical association between oil price and each of the stock prices at low levels of oil prices, below $40 per oil barrel, but no evidence of such cyclical association between the two asset prices at the high oil price levels above $72 per barrel. This implies that the capital markets in these countries and oil market respond in different pattern to cycle generating shocks, as high oil prices may raise global investment risk.

Suggested Citation

Onour, Ibrahim, Crude Oil Price and Stock Markets in Major Oil-Exporting Countries: Evidence of Decoupling Feature (November 13, 2012). International Journal of Monetary Economics and Finance, Vol. 5, No. 1, 2012, Available at SSRN: https://ssrn.com/abstract=2174843

Ibrahim Onour (Contact Author)

University of Khartoum ( email )

Shumbat
Khartoum North
Khartoum, Khartoum 13314
Sudan

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