Oil Volatility and the Option Value of Waiting: Evidence from the Opec

Abstract

Given the striking oil price volatility of recent years, much has been published about its effects on production. Most of these studies, however.focus on the effects in the largest economies. In this paper, we develop a Panel-VAR approach to test whetherprevious results also apply to OPEC- Do OPEC member countries suffer significant production delays resulting from high oil price volatility ?We found evidence that supports this hypothesis.