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Modeling for the world crude oil and natural gas markets

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  • Shibata, Tsubasa

Abstract

Crude oil and natural gas have been essential energy sources and play a crucial role in the world economy. Changes in energy prices significantly impact economic growth. This study builds an econometric model to illustrate the substitute relation between crude oil and natural gas markets. Additionally, the determination of the oil and natural gas prices are endogenized, assuming imperfect competition to reflect a real market strategy. Our empirical results show that the overall performance of this system is acceptable, and the model can be applied to policy analysis for determining monetary or energy policy by introducing this model to the more comprehensive system.

Suggested Citation

  • Shibata, Tsubasa, 2016. "Modeling for the world crude oil and natural gas markets," IDE Discussion Papers 584, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper584
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    References listed on IDEAS

    as
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    5. Mr. Noureddine Krichene, 2005. "A Simultaneous Equations Model for World Crude Oil and Natural Gas Markets," IMF Working Papers 2005/032, International Monetary Fund.
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    More about this item

    Keywords

    Energy; Petroleum; Natural gas; Econometric model; Demand–supply; Imperfect competition;
    All these keywords.

    JEL classification:

    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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