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Navigating Energy Market Cycles: Insights from a Comprehensive Analysis

Author

Listed:
  • Huthaifa Alqaralleh

    (Department of Economics, Business and Finance, Mutah University, Jordan)

  • Awon Almajali

    (Department of Banking and Finance, Mutah University, Jordan)

  • Alessandra Canepa

    (Department of Economic and Statistics Cognetti De Martiis, University of Turin, Lungo Dora Siena 100A, 10153, Turin, Italy; Department of Economics and Finance, Brunel University London, Uxbridge, UB8 3PH, United Kingdom)

Abstract

In this article, we investigate the dynamics the intricacies of fluctuations during periods of economic expansion and contraction, and examining the connections between the length of energy cycles and the influential factors could affect them. Utilizing the extended BBQ algorithm, we firstly identify turning points and, then apply the Cox hazard Model to analyze factors that affect the cycle phases, including geopolitical conflict and economic situations over the period from January 1990 to July 2022. The results reveal the presence of asymmetry in growth phases, highlighting the need for policymakers to understand the factors driving these phases. Market expansion is driven by positive interest rate and US dollar shocks, while stability relies on competent management. During economic contractions, energy costs are influenced by economic growth. Geopolitical risks and economic uncertainty require effective risk mitigation, and policy changes significantly impact the energy market during expansion phases. The study also suggests that Conferences of Parties (COP) meetings have a nuanced influence on the energy market, warranting further research.

Suggested Citation

  • Huthaifa Alqaralleh & Awon Almajali & Alessandra Canepa, 2024. "Navigating Energy Market Cycles: Insights from a Comprehensive Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 14(5), pages 35-48, September.
    • Handle: RePEc:eco:journ2:2024-05-5
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    More about this item

    Keywords

    Energy Market Cycles; Duration Dependencies; Recessionary Phases; Asymmetric Behavior;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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