Report Essay Example | Topics and Well Written Essays - 1000 words - 25

Report - Essay Example Global oil prices significantly fell sharply over the past nine months and this lead to considerable reduction in revenue for many countries exporting the product. The prices have fallen from an all time high of $110 a barrel to a low of $60 a barrel, a significant difference if $50 for a barrel. The trend in the fall of price of oil per barrel is likely to continue as the produced countries have resisted attempts to reduce the production that may increase the price of oil. Economists point to the surge in the United States production and tame economic growth in many countries as the leading causes of the oil price fall. The dynamic nature of oil prices in history has often been linked to stock prices. The ultimate way to validate, the assertion that the stock prices can be the result of changes in oil prices is only through empirical research. Most of the research on the relationship between these two variables are normally in the Western developed countries, and yet oil forms a sig nificant part of the economy of the GCC countries (Alabdulwahab, 2008). The relationship between changes in oil prices and stock markets in GCC countries are important for other significant reasons, other than the one mentioned above. These reasons include the specific characters of their GCC stock markets demands a deep understanding of the underlying oil to equity market relationship (Asia, 2012). The Gulf Cooperation Council, formed in 1981, and it comprises the six countries of UAE, Bahrain, Saudi Arabia, Oman, Qatar, and Kuwait (Arouri, Bellalah and Nguyen, 2011). This paper is a report that shall present the manner in which the changes in oil prices affect the performance of stock markets of the GCC countries Markets in the GCC have reacted sharply to the changes in the oil prices from July 214 to January this year. The last time the prices of oil peaked was September, and since that day the price of oil has fallen drastically by more than fifty