Financial investor sentiment and the boom/bust in oil prices during 2003–2008

Ding Du, Xiaobing Zhao

Research output: Contribution to journalArticlepeer-review

31 Scopus citations


From both theoretical and policy perspectives, it is important to understand if financial speculation contributes to the boom/bust in oil prices during 2003–2008. In this paper, we disentangle the effects of financial speculation from those of economic fundamentals by focusing on exogenous changes of financial speculation in oil markets identified by changes in financial investor sentiment. Furthermore, we focus on a quasi-experiment setting, and investigate both sentiment-driven overvaluation of oil prices and subsequent mispricing correction. Our findings suggest that financial speculation might have contributed to the 2003–2008 boom/bust in oil prices.

Original languageEnglish (US)
Pages (from-to)331-361
Number of pages31
JournalReview of Quantitative Finance and Accounting
Issue number2
StatePublished - Feb 1 2017


  • Financial investor sentiment
  • Financial speculation
  • Oil prices

ASJC Scopus subject areas

  • Accounting
  • General Business, Management and Accounting
  • Finance


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