Speculation in oil and gas prices in times of geopolitical risks

Livia Chiţu, Massimo Ferrari Minesso and Ana-Simona Manu

Economic Bulletin Boxes, 2024, vol. 2

Abstract: Recent volatility in oil and gas prices has rekindled interest in understanding how much fundamental factors – global supply and demand – and non-fundamental factors contribute to price movements. This box constructs indices of speculation based on futures positions. Overall, speculation has only a limited role in both oil and gas price dynamics, although the degree of speculation is somewhat higher in European gas markets than in US gas markets. Empirical estimates also suggest that the role of speculation in amplifying the transmission of fundamental shocks to oil prices is limited, including in times of heightened geopolitical risk. JEL Classification: Q02, F01, F51

Keywords: gas prices; geopolitical risk; oil prices; speculation (search for similar items in EconPapers)
Date: 2024-03
Note: 1840305
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbbox:2024:0002:1

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