Reactions of the S&P 500 and WTI Crude to OPEC Announcements, Disasters, and Geopolitical Unrest

Abstract

We use the event-study methodology to examine S&P 500 and WTI crude reactions to three different types of events: OPEC production quota announcements, "disasters", and "geopolitical unrest". In testing the events, we analyze events occurring before the financial crisis separately from those occurring after the financial crisis. For most of the events, neither the S&P 500 nor WTI crude reacted significantly. The events that did have at least one react significantly were "pre-crisis" OPEC announcements of production quota increases, where the S&P 500 reacted positively briefly, "pre-crisis" "disasters", where the S&P 500 reacted positively briefly and WTI crude reacted negatively, and "post-crisis" "geopolitical unrest", where WTI crude reacted positively.