Posts Tagged ‘speculation’


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Financialization in Oil Markets – lessons for policy

Published: 4th December 2012| By: , Lavan Mahadeva

In the last decade, purely financial players with no interest in the physical commodity such as hedge funds, pension funds, insurance companies, and retail investors have become more prominent in oil futures and derivatives markets.  In parallel, there has been an explosion in the variety of instruments that permit speculation in oil. These movements in […]

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Categories / Energy Comments, Energy Comments, Energy Economics, Finance, Oil, Oil & Middle East Programme

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Assessing the Financialization Hypothesis

Published: 4th December 2012| By: , Lavan Mahadeva

The main objectives of this paper are to assess whether financialization can impact oil market behaviour over and above structural fundamental changes, and whether these changes affect final consumers’ welfare.  While shifts arising in financial investors’ preferences and wealth can explain the rise in participation of purely financial investors, they fail to explain key features […]

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Categories / Finance, Oil, Oil & Middle East Programme, Papers, Working Papers

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The Financialization of Oil Markets: Potential Impacts and Evidence

Published: 18th April 2012| By:

The financialization of oil futures markets has been held responsible for a variety of phenomena including changes in price volatility, increased co-movement between oil futures prices and other financial asset and commodity prices, a breakdown of the statistical relationship between oil inventories and the price of oil, and an increased influence of the decisions of […]

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Categories / Energy Policy, Finance, Oil, Oil & Middle East Programme, Presentations, Presentations Archive

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The Role of Speculation in Oil Markets: What Have We Learned So Far?

Published: 30th March 2012| By: , Lutz Kilian, Lavan Mahadeva

A popular view is that the surge in the price of oil during 2003-08 cannot be explained by economic fundamentals, but was caused by the increased financialization of oil futures markets, which in turn allowed speculation to become a major determinant of the spot price of oil. This interpretation has been driving policy efforts to […]

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Categories / Finance, Oil, Oil & Middle East Programme, Papers, Working Papers

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The Oil Market Through the Lens of the Latest Oil Price Cycle

Published: 1st February 2010| By:

The recent behaviour of prices has polarised views about the key drivers of oil prices. One view attributes the recent behaviour in oil prices to structural transformations in the fundamentals of the oil market. An alternative view considers that oil markets have been distorted by substantial and volatile speculative financial flows. This dichotomy between fundamentals […]

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Categories / Energy Economics, Energy Policy, Energy Security, Oil, Oil & Middle East Programme, Presentations, Presentations Archive, Publications

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Oil Market Dynamics through the Lens of the 2002-2009 Price Cycle

Published: 1st January 2010| By:

During the period 2002 to 2008, the oil market experienced a sustained increase in prices with the annual average price rising year-on-year for seven consecutive years. This boom, however, ended with a spectacular collapse towards the end of 2008. These sharp price movements captured public and political attention and raised concerns within both major consumers […]

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Categories / Energy Economics, Energy Policy, Finance, Oil, Oil & Middle East Programme, Papers

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The Oil Market Through the Lens of the Latest Oil Price Cycle: Issues and Proposals

Published: 1st February 2009| By:

On October 9 2009 the Oxford Institute for Energy Studies held a one-day conference in Oxford on ‘Oil Price Volatility: Causes and Measures of Mitigation Strategies’. The conference focused on three themes: the role of fundamentals and financial factors in explaining the recent sharp swings in oil prices and the marked increase in price volatility; […]

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Categories / Energy Economics, Energy Policy, Energy Security, Oil, Oil & Middle East Programme, Presentations, Presentations Archive, Publications

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Oil Prices: fundamentals or speculation?

Published: 1st June 2008| By: , Bassam Fattouh

In this presentation, Christopher Allsopp and Bassam Fattouh discuss the recent rise in oil prices to around $135 per barrel, arguing that the diminution of feedbacks has destabilised long term expectations of oil prices. This has resulted in an unlocking of the back end of the futures curve, leading to ‘indeterminacy’ and great uncertainty about […]

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Categories / Energy Economics, Energy Policy, Finance, Oil, Oil & Middle East Programme, Presentations, Presentations Archive, Publications

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The Drivers of Oil Prices: The Usefulness and Limitations of Non-Structural model, the Demand–Supply Framework and Informal Approaches

Published: 1st March 2007| By:

The behaviour of oil prices has received special attention in the current environment of rapid rises and marked increase in oil price volatility. It is widely believed that high oil prices can slow economic growth, cause inflationary pressures and create global imbalances. Volatile oil prices can also increase uncertainty and discourage muchneeded investment in the […]

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Categories / Energy Economics, Energy Policy, Oil, Oil & Middle East Programme, Papers

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Analysing Oil Prices

Published: 1st February 2007| By:

In this presentation, Dr Bassam Fattouh discusses three main approaches for analyzing oil prices: non-structural models, the supply-demand framework, and the informal approach. While non-structural models rely on the theory of exhaustible resources as the basis for understanding the oil market, the supply-demand framework uses behavioural equations that link oil demand and supply to its […]

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Categories / Energy Economics, Energy Policy, Oil, Oil & Middle East Programme, Presentations, Presentations Archive, Publications

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