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Speculation and Oil Price Formation

Author

Listed:
  • Bassam Fattouh

    (Oxford Institute for Energy Studies, St Antony’s College, Oxford University, School of Oriental and African Studies, University of London)

Abstract

Can the boom in oil prices be explained in terms of tightened market fundamentals? Or has the oil market been distorted by the entry of financial players? This article will try to shed light on the marked increase in volatility during the latest 2008-2009 price cycle and on the role of speculators in the oil market.

Suggested Citation

  • Bassam Fattouh, 2012. "Speculation and Oil Price Formation," Review of Environment, Energy and Economics - Re3, Fondazione Eni Enrico Mattei, February.
    • Handle: RePEc:fem:femre3:2012.02-04
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    File URL: http://www.feem.it/getpage.aspx?id=4634
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    References listed on IDEAS

    as
    1. Ke Tang & Wei Xiong, 2012. "Index Investment and the Financialization of Commodities," Financial Analysts Journal, Taylor & Francis Journals, vol. 68(6), pages 54-74, November.
    2. Bassam Fattouh & Pasquale Scaramozzino, 2011. "Uncertainty, expectations, and fundamentals: whatever happened to long-term oil prices?," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 27(1), pages 186-206, Spring.
    3. Frans A. De Roon & Theo E. Nijman & Chris Veld, 2000. "Hedging Pressure Effects in Futures Markets," Journal of Finance, American Finance Association, vol. 55(3), pages 1437-1456, June.
    4. Silvennoinen, Annastiina & Thorp, Susan, 2013. "Financialization, crisis and commodity correlation dynamics," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 24(C), pages 42-65.
    5. Pirrong,Craig, 2012. "Commodity Price Dynamics," Cambridge Books, Cambridge University Press, number 9780521195898, Enero-Abr.
    6. Lutz Kilian & Daniel P. Murphy, 2014. "The Role Of Inventories And Speculative Trading In The Global Market For Crude Oil," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 29(3), pages 454-478, April.
    7. Irwin, Scott H. & Sanders, Dwight R., 2012. "Testing the Masters Hypothesis in commodity futures markets," Energy Economics, Elsevier, vol. 34(1), pages 256-269.
    8. Chang, Eric C, 1985. "Returns to Speculators and the Theory of Normal Backwardation," Journal of Finance, American Finance Association, vol. 40(1), pages 193-208, March.
    9. Franklin Allen & Stephen Morris & Hyun Song Shin, 2006. "Beauty Contests and Iterated Expectations in Asset Markets," The Review of Financial Studies, Society for Financial Studies, vol. 19(3), pages 719-752.
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    Citations

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    Cited by:

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    2. repec:aen:journl:ej34-3-intro is not listed on IDEAS

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    More about this item

    Keywords

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    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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