Crude Oil Prices and Stock Markets in Major Oil Exporting Countries: Evidence on Decoupling Feature

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Date
2015
Authors
Onour, Ibrahim Ahmed
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Publisher
University of Khartoum
Abstract
This paper investigates common cyclical features between crude oil market and stock markets in major oil exporting countries including Saudi Arabia, UAE, and Kuwait. The results of the paper indicate, at low oil prices (below $40 per oil barrel) Saudi and Abu-Dhabi markets share common cyclical feature with oil market, but they digress from the oil market as oil prices rose above $40 per barrel. The decoupling feature indicate the capital markets and oil market respond in different pattern to cycle generating shocks, suggesting as higher oil prices may raise global investment risk, stock markets in these countries deflect from their key fundamental driver JEL classification: C10 ;C50 ; G10
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Keywords
Common trends; Shared cycles; nonlinear cointegration
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