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http://dx.doi.org/10.5394/KINPR.2022.46.3.289

The Inter-correlation Analysis between Oil Prices and Dry Bulk Freight Rates  

Ahn, Byoung-Churl (Graduate School of Korea Maritime & Ocean University)
Lee, Kee-Hwan (Division of Maritime Business and Economics, Korea Maritime & Ocean University)
Kim, Myoung-Hee (Division of Maritime Business and Economics, Korea Maritime & Ocean University)
Publication Information
Journal of Navigation and Port Research / v.46, no.3, 2022 , pp. 289-296 More about this Journal
Abstract
The purpose of this study was to investigate the inter-correlation between crude oil prices and Dry Bulk Freight rates. Eco-friendly shipping fuels has being actively developed to reduce carbon emission. However, carbon neutrality will take longer than anticipated in terms of the present development process. Because of OVID-19 and the Russian invasion of Ukraine, crude oil price fluctuation has been exacerbated. So we must examine the impact on Dry Bulk Freight rates the oil prices have had, because oil prices play a major role in shipping fuels. By using the VAR (Vector Autoregressive) model with monthly data of crude oil prices (Brent, Dubai and WTI) and Dry Bulk Freight rates (BDI, BCI and (BP I) 2008.10~2022.02, the empirical analysis documents that the oil prices have an impact on Dry bulk Freight rates. From the analysis of the forecast error variance decomposition, WTI has the largest explanatory relationship with the BDI and Dubai ranks seoond, Brent ranks third. In conclusion, WTI and Dubai have the largest impact on the BDI, while there are some differences according to the ship-type.
Keywords
oil dependency; crude oil prices; dry bulk freight rates; correlation; VAR model;
Citations & Related Records
Times Cited By KSCI : 2  (Citation Analysis)
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