Search

Begin New Search
Proceed to Checkout

Search Results for All:
(Showing results 1 to 4 of 4)



The UK Market for Natural Gas, Oil and Electricity: Are the Prices Decoupled?

Frank Asche, Petter Osmundsen and Maria Sandsmark

Year: 2006
Volume: Volume 27
Number: Number 2
DOI: 10.5547/ISSN0195-6574-EJ-Vol27-No2-2
View Abstract

Abstract:
After opening up of the Interconnector, the liberalized UK natural gas market and the regulated Continental gas markets became physically integrated and the Continental gas price became dominant. However, in an interim period � after deregulation of the UK gas market (1995) and the opening up of the Interconnector (1998) � the UK gas market had neither government price regulation nor a physical Continental gas linkage. We use this period � which for natural gas markets displays an unusual combination of deregulation and autarky � as a natural experiment to explore if decoupling of natural gas prices from prices of other energy commodities, such as oil and electricity, took place. Monthly price data in the period 1995-1998 indicates a highly integrated market where wholesale demand seems to be for energy rather than a specific energy source.



Valuation of International Oil Companies

Petter Osmundsen, Frank Asche, Bard Misund, and Klaus Mohn

Year: 2006
Volume: Volume 27
Number: Number 3
DOI: 10.5547/ISSN0195-6574-EJ-Vol27-No3-4
View Abstract

Abstract:
According to economic theory, exploration and development of new oil and gas fields should respond positively to increasing petroleum prices. But since the late 1990s, stock market analysts have focused strongly on short-term accounting return measures, like RoACE , for benchmarking and valuation of international oil and gas companies. Consequently, exaggerated capital discipline among oil and gas companies may have reduced their willingness to invest for future reserves and production growth. Based on panel data for 14 international oil and gas companies for the period 1990-2003, we seek to establish econometric relations between market valuation on one hand, and simple financial and operational indicators on the other. Our findings do not support the general perception of RoACE as an important valuation metric in the oil and gas industry. We find that the variation in company valuations is mainly explained by the oil price, oil and gas production, and to some extent reserve replacement.



Natural Gas Demand in the European Household Sector

Frank Asche, Odd Bjarte Nilsen and Ragnar Tveteras

Year: 2008
Volume: Volume 29
Number: Number 3
DOI: 10.5547/ISSN0195-6574-EJ-Vol29-No3-2
View Abstract

Abstract:
This paper analyzes the residential natural gas demand in 12 European countries using a dynamic demand model, which allows for country-specific short- and long-run elasticity estimates. The own-price and income elasticities tend to be very inelastic in the short run, albeit with much greater responsiveness in the longer run. Our results support very limited technological substitution possibilities between different energy carriers in the short run. Furthermore, the results suggested structural differences of residential natural gas demand across European countries and provide support for employing a heterogeneous estimator such as the shrinkage estimator.



Modeling UK Natural Gas Prices when Gas Prices Periodically Decouple from the Oil Price

Frank Asche, Atle Oglend, and Petter Osmundsen

Year: 2017
Volume: Volume 38
Number: Number 2
DOI: 10.5547/01956574.38.2.fasc
View Abstract

Abstract:
When natural gas prices are subject to periodic decoupling from oil prices, for instance due to peak-load pricing, conventional linear models of price dynamics such as the Vector Error Correction Model (VECM) can lead to erroneous inferences about the nature of cointegration relationships, price adjustments and relative values. We propose the use of regime-switching models to address these issues. Our regime switching model uses price data to infer whether pricing is oil-driven (integrated) or gas-specific (decoupled). We find that UK natural gas (NBP) and oil (Brent) are cointegrated for the majority of the sample considered (1997-2014). UK gas prices tend to decouple during fall and early winter, when they increase relative to oil consistent with seasonal demand for natural gas creating gas-specific pricing. When evidence favors integrated markets, we find that the industry 10-1 rule-of-thumb holds (the value of one MMbtu of natural gas in the UK market is one tenth the value of one barrel of Brent oil), while the overall relationship, including decoupling periods, is 9.2-1. The paper highlights that what relative value to use, depends on the purpose of its use.





Begin New Search
Proceed to Checkout

 

© 2022 International Association for Energy Economics | Privacy Policy | Return Policy