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Facts From The Contango Situation Of Gas And Oil Markets

Author

Listed:
  • Sonia Benghida

    (Woosong University)

  • Djamil Benghida

    (Department of Architecture - Dong-A University)

Abstract

The year 2017 has been dominated by a series of events and challenges, which among them the oil market is still challenged by high stocks and slow prices development. The overall events can be resumed to: a) OPEC and allied nations are trying to make gains in curbing oil output, not only they extend their cuts, but they also adhere to them, b) US oil production will keep growing and keep costs down, and c) oil demand growth is recently strengthening. This paper intends to answer the question: what is the current state of the oil and gas industry and where is it heading? Since July 2014, the oil market is in a contango situation, i.e., a situation where the future price is above the expected future spot price. The market structure has been benefiting American manufacturers for almost 3 years, and this is the order that OPEC is currently trying to subvert. Much of the oil and gas industry has survived tough years with weak demand and low prices. This article describes first the evolution of the price of gas and oil in the main oil markets and second the rebalancing of the market that can push the price level upwards affecting positively the future equilibrium of many countries.

Suggested Citation

  • Sonia Benghida & Djamil Benghida, 2018. "Facts From The Contango Situation Of Gas And Oil Markets," Post-Print hal-01696522, HAL.
    • Handle: RePEc:hal:journl:hal-01696522
    Note: View the original document on HAL open archive server: https://hal.science/hal-01696522
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    References listed on IDEAS

    as
    1. Djamil Benghida, 2017. "Prospects and challenges in the Korean construction industry: An economic overview," Post-Print hal-01515086, HAL.
    2. Grinets, Irina & Kaznachev, Peter, 2014. "The Role of Innovative Development in Unconventional Hydrocarbon Exploitation in the Context of the Shale Gas Revolution in the USA," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 39(4), pages 436-466.
    3. Sonia Benghida, 2017. "Factors And Challenges In Developing Countries Under The Resource Curse," Post-Print hal-01653339, HAL.
    4. Grinets, Irina & Kaznacheev, Peter, 2014. "The Role of Innovative Development in Unconventional Hydrocarbon Exploitation in the Context of the Shale Gas Revolution in the USA," Research Papers kazn02, Russian Presidential Academy of National Economy and Public Administration.
    5. Sonia Benghida, 2017. "Norwegian Oil Management Structure: Farouk Al-Kasim Innovative Solutions," Post-Print hal-01516617, HAL.
    6. Péter Erdős & Mihály Ormos, 2012. "Natural Gas Prices on Three Continents," Energies, MDPI, vol. 5(10), pages 1-17, October.
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    Keywords

    Gas market; Contango market; Oil market; Shale gas; Strategic plan;
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