Will Natural Gas Prices Decouple From Oil Prices Across the Pond?
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
We show that US natural gas prices have decoupled from oil prices following substantial institutional and technological changes. We then examine how this interrelationship has evolved in Europe using data for Algeria, one of Europe’s key gas suppliers. Taking into account total gas exports and cyclical conditions in partner countries, we find that gas prices remain linked to oil prices, though the nexus has loosened. Both high oil prices and a modest industrial recovery in partner countries have kept gas exports at low levels in recent years, suggesting changing market forces. The paper then shows how such shifts can have important macroeconomic implications for a big gas exporter such as Algeria.
Series:
Working Paper No. 2011/143
Subject:
Economic sectors Export prices Exports Fuel prices International trade Natural gas sector Oil prices Prices
English
Publication Date:
June 1, 2011
ISBN/ISSN:
9781455266449/1018-5941
Stock No:
WPIEA2011143
Pages:
21
Please address any questions about this title to publications@imf.org