Relationship Between Crude Oil And Natural Gas Prices - Essay Example

Only on StudentShare

Extract of sample
Relationship Between Crude Oil And Natural Gas Prices

Observing the pattern of crude oil and natural gas prices generally supports the economic theory and leads to the belief that both commodities do share a relationship. However, over the past few years, a decoupling of natural gas prices from crude oil prices has been observed (refer to graph 1.1 in appendix). This has led concerns over the strength of the relationship between crude and natural gas prices.
Economic factors link crude oil and natural gas prices through supply and demand. There has been a strong conviction regarding the one-way relationship between the prices of crude oil and natural gas, whereby changes in crude figures influence natural gas prices and any changes in natural gas prices have no impact on crude. This is due to the relative size of each market. Prices of crude are determined on the world market whereas natural gas valuation takes place in regionally segmented markets. As a result, any adverse event or condition is unlikely to affect the global price of oil (Villar, Joutz)
This paper attempts to signify the economic and statistical relationship between crude oil and natural gas prices. The period under review is from 1985 to 2005. ...Show more

Summary

This paper examines the relationship between crude oil and natural gas prices. The prices of natural gas and crude behave much as any other commodity experiencing wide price swings in times of shortage or oversupply. The paper tests data from 1985-2000 using regression analysis to substantiate the relationship between the two commodities and further throws light on the reasons for deviation of natural gas prices from crude oil prices…
Author : jgleichner
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Relationship Between Crude Oil And Natural Gas Prices"
with a personal 20% discount.
Grab the best paper

Related Essays

Oil Taxes
This paper intends to look into the different taxes imposed on crude oil according to the new tax codes imposed as an effective contribution to the global economy. In this modern era, the industrial economy around the world has relied so much on oil as the lifeblood of every nation's major source of energy.
15 pages (3750 words) Essay
Crude oil prices
The present study is to find out the causes for the disproportionate escalation of the price of gasoline than the price per barrel of crude oil and its effects on consumers. The aim of selecting any business research method is to give most useful information to the key decision-makers in a most practical and cost-effective way.
2 pages (500 words) Essay
Implication Of Crude Price Differntials To Oil Producing Countries: A Study Based On A Statistical Analysis
The prices of light, low-sulphur grades like American WTI and North Sea Brent grades have at times, risen much faster than those of so-called heavy crude grades that contain sulphur content. For Example, the price of Russian Urals Blend, a heavy grade has occasionally been almost 7 dollars lower per barrel than Brent.
17 pages (4250 words) Essay
Gasoline Prices Research Paper
However, there may also be shorter term influences that the weather has on the price of gas. It is natural to believe that when the weather is clear and sunny that people may want to travel, even for a short distance for the day. This would create a temporary increase in demand that should be reflected in a rise in price.
2 pages (500 words) Research Paper
Oil and Business
One of the main reasons for a global recession is oil prices, which has seen wobbly fluctuations. The world is having increased dependence on oil, although many countries are trying to find alternatives to it. According to the publication, "International Trade Statistics 2008" of the World Trade Organization, global trade was on the rise, but slowed down in 2007 due to weakening demand from developed economies (World Trade Organization).
6 pages (1500 words) Term Paper
Impact of Oil Prices on the US Economy
The global economy is rising at a very fast pace and any corrective action by central banks or Government is not likely to have a perceptible effect if recession sets in. The dependence of the economy on oil has reduced considerably with the strengthening of the IT and services sectors.
7 pages (1750 words) Essay
VALUE OF HUMAN CAPITAL
It is no more about the inventory held by a firm or the valuation of the workshop with machinery and equipments that matters. Dynamic changes take place by the hour as the world has become knowledge-based. Human capital is the profit lever of the
3 pages (750 words) Essay
Health Inequality
Health inequality is a major public health concern not only in developing counties but also in developed country like UK. According to the WHO (2010), health inequality is defined as "differences in health status or in the distribution of health determinants between
5 pages (1250 words) Essay
Issue: Rising Gas Prices
The study analyzes the relationship between the rising gasoline prices and the increasing cost of transit ridership across the United States. Further, the result indicates that the rise in gas prices has no immediate effect on the ridership.
2 pages (500 words) Annotated Bibliography
Find out how much would it cost
to get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT