Financial Stress and Basis in Energy Markets
Bashiri Behmiri, N., Ahmadi, M., Junttila, J.-P., & Manera, M. (2021). Financial Stress and Basis in Energy Markets. Energy Journal, 42(5), 67-87. https://doi.org/10.5547/01956574.42.5.nbeh
Published inEnergy Journal
DisciplineResurssiviisausyhteisöTaloustiedePäätöksentekoa tukeva taloustiede ja talouden kilpailukyky (painoala)Jyväskylä International Macro & FinanceBasic or discovery scholarshipSchool of Resource WisdomEconomicsPolicy-Relevant Economics and Competitiveness of Economy (focus area)Jyväskylä International Macro & FinanceBasic or discovery scholarship
© 2021 IAEE
We investigate the relationship between energy commodities bases, inventory and financial stress from 1994 to 2018. We find that, from the 1998 Asian crisis the effect of financial stress on energy commodities bases gradually increased and from the 2008 crisis became positive, while the effect of inventory showed a gradual decline over time. The reactions of bases to changes in financial stress is nonlinear, as they are higher in the high financial stress periods. This is more profound in crude oil market than heating oil and natural gas. Moreover, the reactions of bases to the changes in inventory is nonlinear, as the reactions are lower when the inventory level is high confirming the theory of storage. We suggest that, in energy market, changes of inventory do not fully explain the variation of energy commodities bases, as the connection between commodity and financial markets increased during the recent years.
PublisherInternational Association for Energy Economics (IAEE)
Publication in research information system
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- Kauppakorkeakoulu 
Additional information about fundingThe authors acknowledge financial support from the Department of Economics, Management, and Statistics of the University of Milan‐Bicocca, University of Stavanger, UiS Business School, and the Jyväskylä University School of Business and Economics.
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