National Oil Sentiment Index: Predictive Strength on Returns of Oil Futures

This paper aims to create a composite national oil sentiment index and examine the sentiment effects on oil futures. The intent is to extrapolate this index for the US market and assess its viability and applicability to other countries in future research. Oil sentiment is measured through certain market behaviors that have conventionally signaled the attitude of buyers and sellers of oil products. In the commodities market, price and its drivers are key components in gauging market sentiment. This research will expand beyond market price and its drivers, and incorporate a holistic approach that encompasses economic uncertainty, military capability, and national energy consumption as proxy inputs.