US political turmoil drives oil prices up, demand down, study finds
Partisan conflict in Washington triggers oil price spikes and reduced demand, according to new research in Energy Economics. The finding matters to traders, energy companies, and policymakers: political uncertainty is now quantifiably moving commodity markets, suggesting geopolitical risk deserves a place alongside traditional supply-and-demand models.
Originaltitel: US partisan conflict, Sino-US political relation news, and oil market dynamics
<p>This study analyzes the effects of US partisan conflict and US-China political relation news shocks on the oil market. A shock to partisan conflict leads to a drop in the political relations news index, a decrease in oil demand, and an increase in oil prices. When the political relations news index rises, it significantly reduces oil demand and prices, with only minor effects on oil supply. The study also finds that negative political news shocks have a more significant impact on the oil market compared to positive news shocks, leading to lower oil prices and demand. These findings suggest important policy considerations for managing the impacts of political news on the oil market.</p>