Assessing the effect of political statements on oil price volatility

Abstract

This research aims to show that statements made by politicians and public servants are a real tool for influencing the oil price. In the research, the authors used the technique for time series study that combines the consistent application of fractal analysis, regression analysis. According to the World Bank, the initial information base was created for daily Brent crude prices for the period from 29.04.2016 to 15.04.2020. A database for statements made by politicians and public servants via electronic media, information and telecommunication networks (including the Internet) was also created. Statements made by politicians and high-ranking military officers have a greater impact on the oil price than political, economic or social statements. All factors, except the one that characterizes politicians' and public servants' statements, affect the oil price, and it decreases by USD 0.02. The results suggest that if the oil price declines during a period of time, it will soon start to increase and this process will take about 18 days.