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Table of Contents

Answer 1:

Answer 2:

Answer 3:

Answer 4:

Reference List.

Quantile Relationship Between Oil and Stock Returns - Answer 1

The COVID-19 spread has triggered a substantial change to global markets in recent times, causing observers to cut their 2020 oil demand estimates. Early last year, leaders of OPEC+ nations held meetings in Vienna, Austria, to negotiate on possibilities of "stabilising" the crude prices sector during the drop in sales. Saudi Arabia required OPEC+ officials to slash the consumption of oil by 1.5 million barrels each day (1.5% of global demand) directly.

While the Covid-19 outbreak (Antonakakis, Chatziantoniou, & Filis, 2020) is affecting industries worldwide, authorities are in search of effective major policies for consolidation. The nature and development of successful policies depend on the mechanisms by which government revenue is influenced by the epidemic, in specific the comes directly of supply and demand forces. Legislators, on the other extreme, need to take steps that protect the future of economic efficiency. For non-economic purposes, these strategies are intended to weather fluctuations in the supply of goods and services, such as disrupted foreign production processes or decreases in labour productivity due to restraint steps taken by Covid-19. Saudi Arabia's recent announcement to increase production and sell its crude oil at deep discounts comes at the end of the peak coronavirus effect.

Since about the middle of the year, the mixture has seen oil prices dropping 50 per cent, with incomplete information as to potential trading volumes. To recognise and measure the financial and non - financial effect on their organisations, a majority of our oil and gas customers are moving, in specific how this affects their portfolio. Organizations are striving to minimise the effect on price, demand, production lines and the economies of essential ventures, the effect on underlying profitability and the immediate challenges they face with cash and working capital

Latest studies show the effect flowed through until the service stations as coronavirus detentions eased oil global prices around in the world, leading to drivers paying at least of $1.02 a litre in Sydney, Melbourne, Brisbane, Adelaide and Perth. This was just the lowest inflation-adjusted monthly price since retail price monitoring started in May 1991, the national consumer watchdog said. Metric gas prices experienced their cleverest rate drop in March after the start of a bidding war between some of the top oil-producing nations of Saudi Arabia and Russia delivered greater supply into a market recovering from demand effect of coronavirus. In March, the commercial Brent price used in Australia dropped to two-decade lows below $US30 a barrel, and in June, America's u.s. the crude contract plunged temporarily into a deep recession.

Quantile Relationship Between Oil and Stock Returns - Answer 2

Price elasticity of demand is an economic indicator of the change in the quantity of the commodity ordered or acquired in comparison to the price change. Economists use market price to explain whether price level increases shifts, given price changes, to understand the structure of the rest of the economy. Some things, for sure, are very inelastic, that is, whose values do not alter very much because of fluctuations in relative prices, for instance, people have to buy fuel and get to working or travel the world, and even if oil prices increase, people will likely still buy nearly the same number of fuel.

Owing to a large drop in demand for petrol in Australia correlated with COVID-19 constraints, it took longer than usual for rates to fall although it took a lot longer for dealers to turn over large quantities purchased at a higher cost. According to the ACCC, petrol inventory levels across Australia were 43 per considerably lower in April opposed to total monthly sales in the month of March 2020. The latest minimum rate for standard unleaded gasoline is $1.11 a litre in Sydney and $1.10 in Melbourne, and according value-tracking website fuel price Australia.

The prices at the bowser in Sydney and urban centres never represented what they would be at any time in the coronavirus era of march, April and May. Exchange rates (Antonakakis, Chatziantoniou & Filis, 2020) should also have dropped within 90 a litre in Sydney, Melbourne and Brisbane, but they never did. The new plunge in oil prices was accompanied by six throughout the previous half-century, prior plummets. Fuel outbreaks during past demand-driven incidents good convergence experiences were faced by exports and imports losing in production (about 0.5 per cent) which were unravelled in three years. In supply-driven manufacturing, oil prices are falling, but oil retailers are falling. No rapid growth peaks were seen, but good convergence emitted photons multinationals were witnessed by losing of production as in the plunges powered by market and less than a third of the losses were three years later, he was unwounded.

The demand of petrol in Australia is elastic (Basher & Sadorsky, 2020) as the price is fluctuating with the response to the crisis impact on the price and the income of individuals who are willing to buy the petrol. the elasticity is due to the wide range of outbreak spread that has hampered the growth and production across the globe and resulted in n the price fluctuation of petrol which income of the individuals are decreased or zero at the time of pandemic ripeness.

Quantile Relationship Between Oil and Stock Returns - Answer 3

The point where market prices are equal is Equilibrium. When the government starts a tax of 0.20 cents, the commodity market equilibrium will change to the left because with the reduction in output due to tax increases. A new equilibrium is reached when the aggregate supply moves from S to S1, where E1 (balance is restored). Pc (price paid by the consumer) but Pp (price paid by the producer) are the costs incurred referring to E1. The absence of Deadweight is a depletion of trade local taxes being levied. And even the region above the price level and just below the quantity demanded is the market excess. Whereas the region underneath the cost (Balcilar, Demirer & Hammoudeh, 2019) and above the equilibrium price is the producer excess. The excess of customers is lowered and the excess of suppliers is also diminished along with taxation. The loss of deadweight is important as it will determine the same detriment to the economy as if commodities were given away or destroyed. Deadweight loss is a value that consumers do not love, which can be seen in this context as a present value of corporation tax; that is, we had to make money off people to raise taxes, so having a dollar in tax income generally costs more than a dollar to civilization. The process of supporting tax revenues includes the money collected (that the investors keep losing), the immediate financing costs, such as tax evaders and local tax administration agencies, and also the depletion of deadweight, the lost value generated by tax rebate effects that minimise trade profits. The loss of deadweight is because of the oversized taxation fee.

Quantile Relationship Between Oil and Stock Returns - Answer 4

As we know In necessity, the cost of international maritime transportation is connected to the cost of petrol. As energy prices decrease, cruise liners and freight trucks are cheaper to run and transport prices are dropping. Savings (or losses) are transmitted (Baker, Bloom & Davis, 2020) on either implicitly or via a fuel cost aspect incorporated into the fee structure of a retailer to customers. And if fuel costs rise, of course, distributors can send on the extra cost to traders.

Tiny company characteristics, so the cost of gasoline is an important aspect of revenue collection. As gasoline prices decline, the dynamic cost also declines and the overall value is also represented as the variable cost per unit and full expenses will also decline in reply to this decreasing because the AFC will remain untouched and as all know fixed costs are also not a volatility aspect, so that also remained

Reference List for Measuring Economic Policy Uncertainty

Antonakakis, N., Chatziantoniou, I., Filis, G., 2020. Dynamic spillovers of oil price shocks and economic policy uncertainty. Energy Economics, 44, 433–447.

Baker, S.R., Bloom, N., Davis, S.J., 2020. Measuring economic policy uncertainty. Quarterly Journal of Economics, 131, 1593–1636.

Balcilar, M., Demirer, R., Hammoudeh, S., 2019. Quantile relationship between oil and stock returns: Evidence from emerging and frontier stock markets. Energy Policy, 134, 110931.

Basher, S.A., Sadorsky, P., 2020. Hedging emerging market stock prices with oil, gold, VIX, and bonds: A comparison between DCC, ADCC and GO-GARCH. Energy Economics, 54, 235–247. .

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