A study on energy prices: market analysis & prices

Energy has become one of the world’s most consumed commodities, affecting different agents worldwide. Individuals account it for their cost of living and and nations are strongly dependant on energy for their imports and exports. Therefore, energy has become one of the most important markets worldwide. This paper identifies the sources of energy volatility, namely, organisations such as the OPEC, or nations such as South Korea. Furthermore, empirical research was performed using an OLS and VAR regressions. In this way, identifying the relationship between energy prices, ECB’s money supply and the Eurozone’s industrial production. The results show Granger causality and a negative relationship for the former and no Granger and a positive relationship causality for the latter. Finally, a life-like virtual shock was induced to money supply and industrial production on energy prices. An increase of money supply and a increase in industrial production both show significant effects on energy prices