Market Structure, Inventories and Oil Prices: An Empirical Analysis

Jennifer Considine, Philipp Galkin and Abdullah AlDayel
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Abdullah AlDayel: King Abdullah Petroleum Studies and Research Center

Discussion Papers from King Abdullah Petroleum Studies and Research Center

Abstract: Understanding the relationship between crude oil prices and inventory levels is critical for policymakers and economic actors. The size of the ‘basis,’ or spread between spot and futures prices, reflects the level of inventories and can trigger arbitrage trading. The basis also reflects broader underlying market conditions and can be useful to policymakers such as the International Energy Agency and OPEC attempting to monitor and stabilize world oil markets.

Keywords: Contango; Oil Markets; Oil Price; Oil Price Shocks; Oil Trade; Satelite Data; Spread Option (search for similar items in EconPapers)
Pages: 47
Date: 2020-02-24
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Persistent link: https://EconPapers.repec.org/RePEc:prc:dpaper:ks--2020-dp02

DOI: 10.30573/KS--2020-DP02

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