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Detecting the horizontal/vertical price relationship patterns in the global oil industry chain through network analysis

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  • Guo, Sui
  • Li, Huajiao
  • An, Haizhong
  • Ma, Ning
  • Sun, Qingru
  • Feng, Sida
  • Sun, Guangzhao
  • Liu, Yanxin

Abstract

The investigation of price relationship patterns within the horizontal regional and vertical industry chain domains of oil market represents a crucial yet under-researched area. This study tackles the inherent complexities in identifying these patterns, arising from three key challenges: the presence of numerous downstream petrochemical products, the interconnectedness of oil product prices across two domains, and the existence of price influence loop. To address these challenges, this study selected 51 oil products from various regions and different segments of oil industry chain, and calculated and tested their price lead-lag relationships. Subsequently, we established and analyzed the price lead-lag relationship networks within two domains. Furthermore, we expanded network topological structure analysis from a single domain to encompass both domains. Finally, employing the network motif analysis method, we successfully detected the price relationship patterns, taking into consideration the intricate nature of price influence loops. Our findings illuminate the general characteristics of the oil market within two domains but also shed light on previous ignored price lead-lag relationships. The thorough analysis and conclusions drawn from this study offer detailed policy implications to downstream refineries and policy makers.

Suggested Citation

  • Guo, Sui & Li, Huajiao & An, Haizhong & Ma, Ning & Sun, Qingru & Feng, Sida & Sun, Guangzhao & Liu, Yanxin, 2024. "Detecting the horizontal/vertical price relationship patterns in the global oil industry chain through network analysis," Energy, Elsevier, vol. 296(C).
    • Handle: RePEc:eee:energy:v:296:y:2024:i:c:s0360544224008260
    DOI: 10.1016/j.energy.2024.131054
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