Energy market financialization: Empirical evidence and implications from East Asian LNG markets

Xunpeng Shi, Yifan Shen () and Yanrui Wu

Finance Research Letters, 2019, vol. 30, issue C, 414-419

Abstract: In the process of transferring from oil indexation to competitive pricing for natural gas, the number of potential gas trading hubs that underpin the competitive prices is a key question, but lack of empirical investigations. This study employs a Structure Vector Auto-regression model (SVAR) and monthly LNG price data of four East Asian importers to examine whether the natural gas markets are integrated among them. The study finds that LNG markets are fragmented in East Asia. The results suggest that there should be multiple LNG benchmark trading hubs at the time being so that each hub could reflect different fundamentals.

Keywords: Market integration; Trading hub; East Asia (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:30:y:2019:i:c:p:414-419

DOI: 10.1016/j.frl.2019.02.004

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