The Dynamics of Oil Production and Sales: Pandemic Context Report

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Introduction

Despite the development of alternative energy sources, oil remains a crucial factor influencing the formation of the domestic economies of states and, as a consequence, the development of the world economy. Based on this, political relations are formed between different states and individual groups of countries. Their development strategies are primarily determined by taking into account the production of oil and petroleum products.

The research issue

The unprecedented reduction in oil demand with an excess of its supply associated with the spread of COVID-19 has led to a colossal imbalance, which caused a record drop in prices. Mhalla (2020) notes that from January to mid-April 2020, the Brent price fell 3.5 times, and WTI futures were sold at a negative price for the first time in the history of exchange trading, clearly demonstrating the vulnerability of the modern pricing system. In this regard, it is advisable to use statistical research methods to assess the product’s condition and predict further prospects for its development. To generalize the changes and to compare the intensity of the dynamics of the volumes of oil production and sales, the average values of the dynamics in absolute and relative terms can be calculated.

According to Shields (2019), it is necessary to identify if there is a trend in the process under consideration for further analysis. For this purpose, a check for stationarity of the levels of the dynamic series can be carried out by the Foster – Stewart method. Ma et al. (2018) assert that if a trend exists, it can be identified, and the accuracy and adequacy of the growth curves can be calculated. If the time series contains not only a trend in dynamics but also fluctuations, it can be carried out. Tsounis and Vlachvei (2018) state that based on the initial data, using the Excel function, a trend equation can be built, which will make it possible to predict the volumes of oil production and sales in the coming period. Thus, statistical research methods will make it possible to assess the current state of the product and predict further prospects for its development.

The research objective

The objective is to estimate the dynamics of oil production and sales. It will allow forecasting further possibilities for its progress in the context of the pandemic caused by the spread of COVID-19.

References

Ma, F., Wei, Y., Liu, L. & Huang, D. (2018). Forecasting realized volatility of oil futures market: A new insight. Journal of Forecasting 37 (4), 419-436.

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.

Shields, M. (2019). Research methodology and statistical methods. Waltham Abbey Essex, United Kingdom: ED-Tech Press.

Tsounis, N.& Vlachvei, A. (2018). Advances in time series data methods in applied economic research: International conference on applied economics (ICOAE) 2018. Cham, Switzerland: Springer Nature Switzerland AG.

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IvyPanda. (2022, July 18). The Dynamics of Oil Production and Sales: Pandemic Context. https://ivypanda.com/essays/the-dynamics-of-oil-production-and-sales-pandemic-context/

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"The Dynamics of Oil Production and Sales: Pandemic Context." IvyPanda, 18 July 2022, ivypanda.com/essays/the-dynamics-of-oil-production-and-sales-pandemic-context/.

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IvyPanda. 2022. "The Dynamics of Oil Production and Sales: Pandemic Context." July 18, 2022. https://ivypanda.com/essays/the-dynamics-of-oil-production-and-sales-pandemic-context/.

1. IvyPanda. "The Dynamics of Oil Production and Sales: Pandemic Context." July 18, 2022. https://ivypanda.com/essays/the-dynamics-of-oil-production-and-sales-pandemic-context/.


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IvyPanda. "The Dynamics of Oil Production and Sales: Pandemic Context." July 18, 2022. https://ivypanda.com/essays/the-dynamics-of-oil-production-and-sales-pandemic-context/.

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