The oil price exposure of global oil companies

Abstract

This study investigates the impact that global oil market risk factors have on the oil price risk of oil company stock prices. Results indicate that oil prices and market risk are both positive and statistically significant priced risk factors. Oil price risk is negatively impacted by increases in oil reserves. Oil price risk is positively impacted by increases in oil production. Oil price risk is more sensitive to changes in production rates than to changes in reserve additions rates.