The relationship between spot and contract gas prices in Europe
Following deregulations in the European gas market, spot trading of natural gas has been established in the UK, Belgium and the Netherlands, while long-term contracts remain the dominant pricing process in continental Europe. In this paper we investigate the degree of market integration between the three spot markets, the contract gas price in Germany and the oil price. The results indicate a highly integrated market, and there is no evidence of an independent price determination process for natural gas.
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