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International Natural Gas Market Integration

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Listed:
  • Raymond Li
  • Roselyne Joyeux
  • Ronald D. Ripple

Abstract

We explore the relationships among the North American, European and Asian natural gas markets for evidence of convergence and integration for the January 1997 through May 2011 period. The analyses are conducted under a multivariate framework, so the dynamics among the prices can be captured without the necessity of identifying an anchor price series. We find evidence of convergence among the Japanese, Korean, Taiwanese and UK prices. The North American price displays behaviour that is distinct from this group of prices. We conclude that there is not a fully integrated international natural gas market. The integration between European (represented by NBP) and Asian geographic regions appears to be due primarily to underlying contractual mechanisms specifically linking natural gas prices to oil prices rather than the result of market supply and demand interactions. We also find that the relationship among the Asian markets has evolved with Japanese prices adjusting to changes in South Korean and Taiwanese prices.

Suggested Citation

  • Raymond Li & Roselyne Joyeux & Ronald D. Ripple, 2014. "International Natural Gas Market Integration," The Energy Journal, , vol. 35(4), pages 159-180, October.
    • Handle: RePEc:sae:enejou:v:35:y:2014:i:4:p:159-180
    DOI: 10.5547/01956574.35.4.7
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    References listed on IDEAS

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    1. repec:aen:journl:hh-se-a12 is not listed on IDEAS
    2. Siliverstovs, Boriss & L'Hegaret, Guillaume & Neumann, Anne & von Hirschhausen, Christian, 2005. "International market integration for natural gas? A cointegration analysis of prices in Europe, North America and Japan," Energy Economics, Elsevier, vol. 27(4), pages 603-615, July.
    3. repec:aen:journl:1996v17-02-a02 is not listed on IDEAS
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    Cited by:

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    2. Vásquez Cordano, Arturo L. & Zellou, Abdel M., 2020. "Super cycles in natural gas prices and their impact on Latin American energy and environmental policies," Resources Policy, Elsevier, vol. 65(C).
    3. repec:aen:journl:ej39-1-hartley is not listed on IDEAS
    4. Fei Liu & Honglin Yao & Yanan Chen & Xingbei Song & Yihang Zhao & Sen Guo, 2025. "Risk Spillover of Energy-Related Systems Under a Carbon Neutral Target," Energies, MDPI, vol. 18(13), pages 1-27, July.
    5. Bastianin, Andrea & Galeotti, Marzio & Polo, Michele, 2019. "Convergence of European natural gas prices," Energy Economics, Elsevier, vol. 81(C), pages 793-811.

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