The Analysis of Crude Oil Price's Dynamic Effects on Iran's Methanol

The review of energy، as a strategic commodity in the world، also analyzing how the effect of its movement prices on the key economy factors، has always been important. Significance of this case is multiplied in IRAN، because this country is one of the huge crude oil and gas exporters in the word. On the other hand، expanding the non-oil export expansion has been gravity point of policy makers thinking for several reasons such as crude oil price volatilities and revenue from its export. Accordingly، methanol as one of the most used petrochemical products has great potential in the field of production and non-oil exports in that country. Therefore، the main aim of this survey is investigate the dynamic relationship between Iran''s crude oil and methanol prices by using weekly time series data from last week of 1387/10 to last week of 1390/6 and applying the Vector Error Correction Model (VECM). The results of this study show that there is a significant positive long run relationship between the crude oil and the methanol prices، while this is not their short run relationship. Moreover، Error Correction Term (ECT) coefficient is significant in 95% confidence level and it is equal to -0. 11. Furthermore، the result of impulse-response function confirms that، firstly، the methanol and the crude oil prices have direct relationship and secondly، the crude oil price shocks will effect on the methanol price in long term.