Development of a Stochastic Risk Assessment Protocol for Analyzing the Impact of Fluctuations in Crude Oil and Fuel Prices on Asphalt Prices in the State of Alabama
Publication: Construction Research Congress 2024
ABSTRACT
This paper examines the long-held hypothesis that the price of asphalt is related to the price of crude oil and fuel. A stochastic risk assessment tool using a modified cumulative sum (CUSUM) statistical analysis method was used to determine their relationship using monthly-posted asphalt, crude oil, and fuel price indexes by the Alabama Department of Transportation (ALDOT) and US Energy Information Administration (EIA). The results indicated that the most likely time gap between crude oil and asphalt price indexes was three months, and the percentage change was 58%, and two months and 46% between fuel and asphalt price indexes. The risk assessment tool enables the prediction of the timeline of asphalt price changes along with the magnitude of the changes and risks associated with those changes based on relationships with crude oil and fuel.
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Construction Research Congress 2024
Pages: 196 - 206
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Published online: Mar 18, 2024
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