How is the database time zone set?

Answer: it is set at creation time.
If not explicitly defined by the DBA, it will use the time zone of the server's operating system.

If you want to set it explicitly, do so in the CREATE DATABASE statement:

CREATE DATABASE PRODDB
.
.
SET TIME_ZONE='-05:00';

Or set it to a named region, like this:

CREATE DATABASE PRODDB
.
.
SET TIME_ZONE='Europe/Zurich';

The database time zone is relevant only for TIMESTAMP WITH LOCAL TIME ZONE columns.

You can change the database time zone by using the SET TIME_ZONE clause of the ALTER DATABASE statement:

ALTER DATABASE SET TIME_ZONE='05:00';
ALTER DATABASE SET TIME_ZONE='Europe/Zurich';

The ALTER DATABASE SET TIME_ZONE statement will return an error if the database contains a table using a TIMESTAMP WITH LOCAL TIME ZONE column and the column contains data. You will also have to restart the database.


To see the current time zone of the database:
SELECT DBTIMEZONE,SESSIONTIMEZONE FROM DUAL;

DBTIMEZONE	SESSIONTIMEZONE
+01:00	Europe/Zurich

For a database used globally, it may be beneficial to set the database time to UTC (0:00) regardless of where it is physically hosted.

Source: Oracle Documentation