Date of Graduation
5-2016
Document Type
Thesis
Degree Name
Bachelor of Science in Business Administration
Degree Level
Undergraduate
Department
Finance
Advisor/Mentor
Rennie, Craig G.
Committee Member/Reader
Santamaria, Sergio F.
Abstract
This paper investigates the relation between crude oil price volatility and stock returns among oil companies using a three-part methodology, by using the West Texas Intermediate (WTI) as oil price benchmark. I asses the various indicators that set signals for oil price volatility and the interpretation of each (PMI, S&P500, DJIA, and World Crude Oil Output). This research also focuses on the relation between different types of companies in the oil industry (integrated, upstream, and downstream) and how each type of company will be assessed in a particular way to predict abnormal returns, based on market data and statistical analyses results and interpretation.
Citation
Garcia, J. P. (2016). Financial Performance in Upstream, Downstream, and Integrated Oil Companies in Response to Oil Price Volatility. Finance Undergraduate Honors Theses Retrieved from https://scholarworks.uark.edu/finnuht/34
Included in
Business Administration, Management, and Operations Commons, Corporate Finance Commons, Finance Commons, Finance and Financial Management Commons, Oil, Gas, and Energy Commons, Portfolio and Security Analysis Commons, Risk Analysis Commons
Comments
This paper makes three contributions to the literature on the determinants of oil company performance. First, it gives a trend analysis methodology that serves as a first indicator of both oil prices, and oil company’s stock return levels. Second, it provides a guide on understanding the oil industry and its different reactions to crude oil volatility. Finally, this paper demonstrates the timely movements and the significance of these fluctuations on oil stock returns. With this paper I expect to give the reader a clear explanation of the relation between oil price volatility and the financial and stock return performance of different types of oil companies during different time periods. I also anticipate highlighting findings that suggest signals to look for when interpreting data or searching for relevant variables for predicting investment performance.