Oil Production as a Leading Indicator for Tanker Freight Market

Özet

The aim of this study is to determine the causality between oil production andfreight rates in the seaborne oil transportation in the world. The causality with oil priceshas been studied more in the literature, but the studies that examine the causality withoil production have been limited. However, the effect of the crude oil production amounton the market is also great. The methods that can detect delayed causality have beenutilized unlike the existing literature. While the Baltic Dirty Tanker Index (BDTI) andBaltic Clean Tanker Index (BCTI) variables are used as the measurement for the tankerfreight rates, the Bloomberg oil production index variable is used as the productionmeasurement. The data set used in the study consists of 239 monthly observationscovering between August 1998 and June 2018. Standard causality analysis developedby Granger (1969) is used for linear causality, and nonparametric tests developed byHiemstra and Jones (1996) and Diks and Panchenko (2006) are used for nonlinearcausality analysis. While linear causality cannot be spotted in the obtained results,nonlinear causality is determined. As a result of the four lagged nonlinear causalityanalyzes made, the causality is found from the second to the fourth lag for BDTI andfrom the first to the fourth lag for BCTI. According to these results, while the effect ofchanges in production is directly reflected in the product tanker market, it is reflectedon the dirty tanker market with a delay. It is hoped that these results may be beneficialto developing business strategies and reducing risks for shipowners and charterers inthe tanker market.