Quantifying the Speculative Component in the Real Price of Oil: The Role of Global Oil Inventories

  title={Quantifying the Speculative Component in the Real Price of Oil: The Role of Global Oil Inventories},
  author={Lutz Kilian and Thomas K Lee},
  journal={CEPR Discussion Paper Series},
One of the central questions of policy interest in recent years has been how many dollars of the inflation-adjusted price of oil must be attributed to speculative demand for oil stocks at each point in time. We develop statistical tools that allow us to address this question, and we use these tools to explore how the use of two alternative proxies for global crude oil inventories affects the empirical evidence for speculation. Notwithstanding some differences, overall these inventory proxies… 
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