The effects of crude oil prices in the world market on regional prices of gas, Vector Error Correction approach

Subject Areas : Labor and Demographic Economics

Ali Aghili Moghaddam ¹ ( Ph.D. student of Economics Sciences, Economics and Accounting, Faculty of the Islamic Azad University, Central Tehran Branch, Tehran, Iran )
Ebrahim Abbassi ² ( Assistant Professor, Department of Economics, Faculty of Economics and Accounting, Islamic Azad University, Central Tehran Branch, Tehran, Iran )
Shahriar Nessabian ³ ( Associate Professor, Department of Economics, Faculty of Economics and Accounting, Islamic Azad University, Central Tehran Branch, Tehran, Iran )
Marjan Damankeshideh ⁴ ( Assistant Professor, Department of Economics, Faculty of Economics and Accounting, Islamic Azad University, Central Tehran Branch, Tehran, Iran )

Received: 2019-08-28 Accepted : 2020-06-01 Published : 2020-04-20

Keywords: Q43, Regional markets, JEL Classification: Q40, World Crude Oil Prices, C51. Keywords: Gas Prices,

Abstract :

The purpose of this paper is to investigate the long-term and short-term relationships between the behavior of gas and oil prices in regional markets and their impact on each other using the VECM correction method during the period 2000-2019. For this purpose, due to the wide range of variables in each region, proxy technique has been used to analyze the markets of gas and oil regions. The findings show that among the regional prices of the gas and oil market in Asia and Europe (unlike the US market), due to the relationship of aggregation, the influence of oil market fluctuations is very high. Due to the importance of the role of financial markets in facilitating oil and gas transactions, it is suggested that the major supply of oil and gas through the energy exchange be considered.

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