Evidence on the nature and extent of the relationship between oil prices and equity values in the UK

Idris El-Shari, Dick Brown, Bruce Burton, Bill Nixon, Alex Russell

Research output: Contribution to journalArticle

Abstract

A number of recent studies have found a link between movements in crude oil prices and equity values. However, the literature concentrates almost exclusively on North American and Australian data and is primarily conducted at a stock market-wide level. The present study therefore investigates the relationship between the price of crude oil and equity values in the oil and gas sector using data relating to the United Kingdom, the largest oil producer in the European Union. The evidence indicates that the relationship is always positive, often highly significant and reflects the direct impact of volatility in the price of crude oil on share values within the sector.

Original languageEnglish
JournalEnergy Economics
DOIs
Publication statusPublished - 1 Nov 2005

Keywords

  • volatility
  • inter-sectoral comparison
  • oil prices
  • share returns

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