Gasoline vs. Crude Oil Correlation 2005 – Feb 2008
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JR, many thanks for maintaining this site and updating this plot. FYI, I have used this plot in my college teaching (mineral resources classes, both undergraduate and graduate). It is to my knowledge the only plot of this nature, as I have looked fairly hard for similar work on the internet. This seemingly simple plot shows many interesting features, which I’m sure you are also aware of, and it has predictive capability.
Mahalos and regards,
I would like to see a plot of the change in crude price vs the change in oil price. I’ll bet that there is a strong correlation when crude goes up, but a much weaker correlation when crude goes down.
10/10/08 Posting this as all markets are crashing. Reflecting Bob’s comment, really would like to see this data as some sort of time series. Putting dates on data would be helpful, but messy on such a small web plot. Can you make the data available (assuming its in some sort of spread sheet) for others to analyze? Very interesting. Thank you.
The data is all available in spreadsheet form from the EIA.
I might add a time series version the next time I update this one. Maybe early bext year, unless gasoline moves above $4 sooner than that. For now we are simply retracing old history. That’s the purpose of the correlation chart.
I did this time series chart of gasoline vs. crude oil in April:
THanks for the plot. Very helpful. Are the X and Y axis labels reversed?
Beware, this is a spurrious regression. R-sqared values etc will be high when calculated but entirely meaningless. What is being discussed here is in fact not correlation but cointegration. Correlation is the relationship between the differenced closing prices. Cointegration is the long run relationship. Correlation cannot be performed on non-stationary (unit root) time series.
I wrote a blog about crude oil and gasoline prices (vs. time, however). Please check it out:
crude oil price history graph…
[…]Gasoline vs. Crude Oil Correlation 2005 – Feb 2008 « Crude Oil[…]…
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