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Updated: Oct 25, 2025

Measurement of the Rheology of Crude Oil in Equilibrium with CO2 at Reservoir Conditions
Published on: June 6, 2017
Energy market uncertainty and the impact on the crude oil prices
Bing Xu1, Rong Fu2, Chi Keung Marco Lau3
1Edinburgh Business School, Heriot-Watt University, Edinburgh, EH14 4AS, UK.
Abstract:
Our paper proposes a novel measure of global energy market uncertainty and studies its impact on oil prices. The current literature primarily relies on a single or small number of observable variables, or general macroeconomic uncertainty (JLN) and economic policy uncertainty (EPU) indices to reflect energy market uncertainty. Using a Factor Augmented Vector Autoregression model (FAVAR), we construct time-varying global energy market uncertainty in a data-rich environment. Our estimates show variations from JLN and EPU proxies. The results reveal that real oil prices respond strongly to our proposed aggregate energy market uncertainty shocks. We also find heterogeneous responses to different types and magnitudes of uncertainty shocks. The real price of oil is affected the most under unexpected strong demand for alternative energy sources scenario.
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