The Role of Speculation in the Determination of Energy Prices

Cilt: 2 Sayı: 4 1 Aralık 2012
  • Umar M. Mustapha
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The Role of Speculation in the Determination of Energy Prices

Abstract

This paper seeks to evaluate the role of speculation in the determination of global energy prices. Designed as a case study, five major oil producing countries are the focus of this positivistic study: Nigeria, Mexico, Iran, Saudi Arabia and Russia. Data is collected through secondary sources. One-tailed and two-tailed tests carried out on the relationship between speculation and oil prices for each of the five countries yield critical values lower than the alpha. Thus, the null hypothesis is rejected in favor of the alternate hypothesis that ‘there is a significant and positive correlation between commodity derivatives (oil futures) and oil prices’. The study found that while there is a positive relationship between speculation in the commodity derivatives market and oil prices, such a relationship is at best weak and attributes the high prices to several factors, including political instability, high and rising demand from overheating economies such as China, and falling production levels, among others. The paper emphasized the need to enhance the physical and financial transparency of the energy market, as well as the operation of the supply and demand fundamentals, including regulating against insider trading and market manipulation practices, strengthening the reporting requirements of the dealers in the market, and strengthening capital adequacy and margin requirements.

Keywords

Ayrıntılar

Birincil Dil

İngilizce

Konular

-

Bölüm

-

Yazarlar

Umar M. Mustapha Bu kişi benim

Yayımlanma Tarihi

1 Aralık 2012

Gönderilme Tarihi

1 Aralık 2012

Kabul Tarihi

-

Yayımlandığı Sayı

Yıl 2012 Cilt: 2 Sayı: 4

Kaynak Göster

APA
Mustapha, U. M. (2012). The Role of Speculation in the Determination of Energy Prices. International Journal of Energy Economics and Policy, 2(4), 279-291. https://izlik.org/JA42AG35NJ
AMA
1.Mustapha UM. The Role of Speculation in the Determination of Energy Prices. IJEEP. 2012;2(4):279-291. https://izlik.org/JA42AG35NJ
Chicago
Mustapha, Umar M. 2012. “The Role of Speculation in the Determination of Energy Prices”. International Journal of Energy Economics and Policy 2 (4): 279-91. https://izlik.org/JA42AG35NJ.
EndNote
Mustapha UM (01 Aralık 2012) The Role of Speculation in the Determination of Energy Prices. International Journal of Energy Economics and Policy 2 4 279–291.
IEEE
[1]U. M. Mustapha, “The Role of Speculation in the Determination of Energy Prices”, IJEEP, c. 2, sy 4, ss. 279–291, Ara. 2012, [çevrimiçi]. Erişim adresi: https://izlik.org/JA42AG35NJ
ISNAD
Mustapha, Umar M. “The Role of Speculation in the Determination of Energy Prices”. International Journal of Energy Economics and Policy 2/4 (01 Aralık 2012): 279-291. https://izlik.org/JA42AG35NJ.
JAMA
1.Mustapha UM. The Role of Speculation in the Determination of Energy Prices. IJEEP. 2012;2:279–291.
MLA
Mustapha, Umar M. “The Role of Speculation in the Determination of Energy Prices”. International Journal of Energy Economics and Policy, c. 2, sy 4, Aralık 2012, ss. 279-91, https://izlik.org/JA42AG35NJ.
Vancouver
1.Umar M. Mustapha. The Role of Speculation in the Determination of Energy Prices. IJEEP [Internet]. 01 Aralık 2012;2(4):279-91. Erişim adresi: https://izlik.org/JA42AG35NJ