Introduction
Oil remains a determinant of many economic and political decisions universally due to its value. Oil is responsible for many political disputes within various countries and against others due to its power over a nation (Strüver & Wegenast, 2016). Oil is also a cause for political formations between countries, promoting regional and international cooperation. The price and supply of oil have been relatively stable for the longest time until the onset of the COVID-19 pandemic in 2019 (Mhalla, 2020). The pandemic saw the prices and supply of oil take a steep decline, affecting international economies.
This research seeks to estimate the dynamics of oil production and sales. The research outcome will be to develop a practical way of forecasting expected trends in oil production and prices in the face of the pandemic. The effect of the expected outcome is to enable countries and private oil traders to plan their business expeditiously. This will lead to minimized wastage of oil and increased quantities for consumers.
Type of Data to be Collected
In order to ensure that the quantitative statistical research method is successful, the data to be collected include sales, production, and prices of oil. Information on sales is crucial in ensuring an understanding of oil consumption despite the prevailing pandemic. Data on oil production can offer insights into the level of activity in the oil industry during the pandemic (Olayungbo & Adediran, 2017). Data on prices of oil over time is crucial in ensuring an understanding of these dynamics.
Data on how various crude oil products were used during the pandemic includes data on which sectors consumed different quantities of various products such as petroleum and diesel. Data on the consumption, price, and production of oil and its products by different countries and sectors is also vital for making comparisons and creating a functional hypothesis. Data on the storage quantities of oil and its products is vital for determining the level of consumption of this essential commodity (Parsoya, 2021). The sample of the study will be the Organization of Petroleum Exporting Countries (OPEC) which will provide the necessary documents for review on oil production. The United States Department of Energy will also serve as a source of documents on oil consumption and prices.
Quantitative Data Collection Approach
The preferred data collection approach for this research is the document review due to its convenience. Document review involves the review of previous documents on the dynamics of the oil trade (Akçay, 2021). The oil trade business relies on expeditious record keeping due to its significance to various economies and the massive impact mishandling would have on the global economy. The digitalization of record-keeping in various organizations, including government institutions, also assures that data collection will be done with utmost ease. The documents appropriate for this method’s quantitative research method include various oil sale receipts from producers, processors, and final sellers.
This research also comes when a global pandemic is in progress and threatens human health if physical contact is pursued. Other methods such as interviews are likely to demand physical meetings that predispose people to COVID-19. Therefore, document review is an appropriate protection mechanism for the likely participants of the research. The use of document review also requires minimal movement owing to the digitalization of record-keeping and immense development of digital communication.
The researcher does not need to travel to the various companies to access the documents. They can simply acquire them by calling the various oil organizations and requesting their cooperation and aid. The convenience of the document review method has been demonstrated by previous research projects on oil dynamics and proven appropriate. Lin and Su (2020) used the document review method to analyze the oil stock market trends and found the method particularly appropriate for oil research. This is due to the availability of sufficient information regarding oil that is appropriately documented.
Quantitative Data Analysis Approach
The preferred data analysis approach for this research is descriptive statistics, also called descriptive analysis. The data analysis phase of this research will involve data preparation that incorporates three phases. The data validation stage involves screening the data collected to ensure that it meets the pre-set standards. The data editing stage will involve correcting errors to ensure it is error-free before its analysis. The data coding phase that involves the grouping of the data collected will ease the analysis. Descriptive statistics will enable the researcher to summarize the data collected and find patterns.
Standard statistics that will be considered with oil production, sale, and consumption are the mean, median, mode, percentages, frequency, and range. Coming up with mathematical correlations between different aspects of the oil trade will enable the researcher to formulate an effective means of predicting future changes. Descriptive statistics is the chosen method for this research due to the nature of the data collected. This research majorly involves the collection of numerical data ranging from oil consumption quantities to prices variation.
Previous studies such as Nonejad (2020) utilized descriptive statistics when coming up with a means of predicting equity premiums using oil prices. The method proved successful as various mathematical inferences such as mean and median were used and provided a base for predicting equity premiums changes. Dia et al. (2021) carried out a study using descriptive statistics to determine the efficiency measurement of Canadian oil and gas companies and found the results satisfactory.
References
Akçay, S. (2021). Are oil prices and remittance outflows asymmetric? Evidence from Saudi Arabia. Energy RESEARCH LETTERS, 2(1), 18948.
Dia, M., Takouda, P. M., & Golmohammadi, A. (2021). Efficiency measurement of Canadian oil and gas companies. International Journal of Operational Research, 40(4), 460.
Lin, B., & Su, T. (2020). Mapping the oil price-stock market nexus researches: A scientometric review.International Review of Economics & Finance, 67, 133–147.
Mhalla, M. (2020). The impact of novel Coronavirus (COVID-19) on the global oil and aviation markets. Journal of Asian Scientific Research, Asian Economic and Social Society, 10(2), 96-104.
Nonejad, N. (2020). Predicting equity premium by conditioning on macroeconomic variables: A prediction selection strategy using the price of crude oil. Finance Research Letters, 41, 101792.
Olayungbo, D. O., & Adediran, K. A. (2017). Effects of oil revenue and institutional quality on economic growth with an ARDL approach.Energy and Policy Research, 4(1), 44–54.
Parsoya, S. (2021). Significance of technology and digital transformation in shaping the future of oil and gas industry. Turkish Journal of Computer and Mathematics Education (TURCOMAT), 12(3), 3345–3352.
Strüver, G., & Wegenast, T. (2016). The hard power of natural resources: Oil and the outbreak of militarized interstate disputes. Foreign Policy Analysis, 14(1), 86-106