Reasons Behind Words: OPEC Narratives and the Oil Market - Archive ouverte HAL
Pré-Publication, Document De Travail Année : 2023

Reasons Behind Words: OPEC Narratives and the Oil Market

Celso Brunetti
  • Fonction : Auteur
Marc Joëts
  • Fonction : Auteur
  • PersonId : 991178
Valérie Mignon
  • Fonction : Auteur
  • PersonId : 1016632

Résumé

We analyze the content of the Organization of the Petroleum Exporting Countries (OPEC) communications and whether it provides valuable information to the crude oil market. To this end, we derive an empirical strategy which allows us to measure OPEC’s public signal and test its credibility. Using Structural Topic Models, we identify several topics in OPEC narratives. We show that these topics are related to fundamental factors such as demand, supply, and speculative activity in the crude oil market, highlighting that OPEC narratives are highly linked to oil market volatility and traders’ positions. We also find that OPEC communication is credible, reduces oil price volatility, and prompts market participants to rebalance their positions.
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Dates et versions

hal-04196053 , version 1 (05-09-2023)

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  • HAL Id : hal-04196053 , version 1

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Celso Brunetti, Marc Joëts, Valérie Mignon. Reasons Behind Words: OPEC Narratives and the Oil Market. 2023. ⟨hal-04196053⟩
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