Impact of oil prices on key energy mineral prices: Fresh evidence from quantile and wavelet approaches

Abstract

The intricate relationship between the prices of oil and key energy minerals is vital for understanding the dynamics of energy markets and guiding future energy-related policies. In this study, we examine the influence of oil prices on key clean energy mineral prices by employing quantile and wavelet approaches. The main empirical results are as follows. First, the quantile cointegration test reveals a long-term equilibrium between oil and energy mineral prices, indicating that oil price changes influence these prices over time. Second, the quantile causality test shows that oil price changes significantly affect key energy mineral prices, particularly in tranquil markets. However, under the extreme conditions of energy mineral markets, this influence is generally insignificant, except for cobalt and manganese. Third, oil prices show stronger long-term positive correlations with most energy minerals, except cobalt, lithium, manganese, and rare earth elements, whose prices are shaped by renewable energy transitions, inefficiencies, and reliance on long-term contracts. Policymakers, investors, and companies can use these insights for risk management and strategic planning of clean/renewable energy projects.