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The Major Driving Forces of the EU and US Ethanol Markets with Special Attention Paid to the COVID-19 Pandemic

Mizik, Tamás and Nagy, Lajos and Gabnai, Zoltán and Bai, Attila (2020) The Major Driving Forces of the EU and US Ethanol Markets with Special Attention Paid to the COVID-19 Pandemic. Energies, 13 (21). DOI https://doi.org/10.3390/en13215614

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Official URL: https://doi.org/10.3390/en13215614


Abstract

Ethanol is a widely produced fuel, as well as a fuel additive. Its price is closely related to the price of gasoline, its major substitute. This paper focuses on the impacts of the related variables on regional ethanol prices. Additionally, the length of the price dataset made it possible to isolate the impacts of COVID-19 on the ethanol prices. Using multiple regression and Confirmatory Factor Analyses, we found no significant correlation between the European and US ethanol prices because the major influencing factors were regionally different. In the case of the European ethanol markets, the positive factors were wheat, maize, and potassium chloride prices, while the European sugar and diammonium phosphate prices were negative. In the US markets, gasoline, sugar, and most of the artificial fertilizer prices were positive, while wheat prices were negative. Based on factor analysis, artificial fertilizers and maize factors proved to be important to the European markets, while US ethanol prices were driven by the crude oil-gasoline and raw materials factors. The COVID variable showed no significant connection with the EU prices, but negatively affected the US ethanol prices. This is explained by the different market characteristics, as the US is not only the major consumer, but also the major producer of the different oil products. Therefore, COVID-19 had a double effect on their oil and ethanol markets.

Item Type:Article
Uncontrolled Keywords:ethanol, oil, price analysis, correlation, COVID
Subjects:Energy economy
Social welfare, insurance, health care
DOI:https://doi.org/10.3390/en13215614
ID Code:5985
Deposited By: MTMT SWORD
Deposited On:29 Oct 2020 11:18
Last Modified:29 Oct 2020 11:18

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