Do Oil Prices influence Non-Oil Sector Stocks in Saudi Arabia Research Paper - 1

Do rock anele Prices influence Non-Oil heavens Stocks in Saudi-Arabian-Arabian Arabia - Research Paper ExampleOil is one of the most main(prenominal) stinting resources in global economy today. Fluctuations and shocks in anoint prices have been studied extensively by many an other(a)(prenominal) leading economists. Several economic theories point to the continue of changes in petroleum price on other commodities as well as in the creative activity economies. The context of oil is even more important in the Saudi Arabian economy as it is has one of the biggest reserves of oil (one-fifth of worlds fare) and is the second largest producer (behind Russia) of oil in the world. Saudi Arabia has proven oil reserves of 264.52 billion lay of oil and recently surpassed by Venezuela who claimed their oil reserves had risen to 269.5 billion barrels of oil. In ground of oil output signal, Saudi Arabia has a quota allocation of skillful over 30% of production among Organisation of the crude Exporting Countries (OPEC) countries. The Saudi Arabian oil production in 2010 was 9.1 million barrels per day which accounted for 13% of worlds total oil production. Oil is the major driver of economic activity in Saudi Arabia. Oil related activities accounted for 47% of the gross domestic product in 2010, and petroleum products exports amounted to $193 billion and accounted for 84% (by value) of total exports in Saudi Arabia. Therefore, oil prices count a vital role in the Saudi Arabian economy. However, from the perspective of an investor or an enterprise in Saudi Arabian market, it is also important to know whether oil prices have a major role to play in stock prices of non-oil sector companies too. ... Fluctuations and shocks in oil prices have been studied extensively by many leading economists. Several economic theories point to the impact of changes in oil price on other commodities as well as in the world economies. The context of oil is even more important in the Saudi Arabian economy as it is has one of the biggest reserves of oil (one-fifth of worlds total) and is the second largest producer (behind Russia) of oil in the world. Saudi Arabia has proven oil reserves of 264.52 billion barrels of oil (OPEC, 2011) and recently surpassed by Venezuela who claimed their oil reserves had risen to 269.5 billion barrels of oil. In terms of oil production, Saudi Arabia has a quota allocation of just over 30% of production among Organisation of the Petroleum Exporting Countries (OPEC) countries. The Saudi Arabian oil production in 2010 was 9.1 million barrels per day which accounted for 13% of worlds total oil production. Oil is the major driver of economic activity in Saudi Arabia. Oil related activities accounted for 47% of the GDP in 2010 (MoF, 2011), and petroleum products exports amounted to $193 billion and accounted for 84% (by value) of total exports in Saudi Arabia (OPEC, 2011). Therefore, oil prices play a vital role in the Saudi Arabian econ omy. However, from the perspective of an investor or an enterprise in Saudi Arabian market, it is also important to know whether oil prices have a major role to play in stock prices of non-oil sector companies too. If there is a high positive correlation between oil prices and non-oil sector stocks, an investor can use these stocks to hedge on their investments in oil. The outcome of this study could therefore be very useful for foreign investors and enterprises already present or planning to enter the Saudi