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

Xunpeng Shi, Yifan Shen, Yanrui Wu

Research output: Contribution to journalArticle

6 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)414-419
JournalFinance Research Letters
Volume30
DOIs
Publication statusPublished - Sep 2019

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