Discussion Paper Details

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Title: Energy Markets and Global Economic Conditions

Author(s): Christiane Baumeister, Dimitris Korobilis and Thomas K. Lee

Publication Date: April 2020

Keyword(s): Energy demand, Forecasting, oil price pressures, petroleum consumption, state of the world economy and stochastic volatility

Programme Area(s): International Macroeconomics and Finance and Monetary Economics and Fluctuations

Abstract: This paper evaluates alternative indicators of global economic activity and other market fundamentals in terms of their usefulness for forecasting real oil prices and global petroleum consumption. We find that world industrial production is one of the most useful indicators that has been proposed in the literature. However, by combining measures from a number of different sources we can do even better. Our analysis results in a new index of global economic conditions and new measures for assessing future tightness of energy demand and expected oil price pressures.

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Bibliographic Reference

Baumeister, C, Korobilis, D and Lee, T. 2020. 'Energy Markets and Global Economic Conditions'. London, Centre for Economic Policy Research.