Interim Global Oil and Gas Price Benchmarks and the Feasibility of a Party to Party Bargaining Model
نویسنده
چکیده
This study further develops a party to party gas price bargaining model (expanded in a research paper by Okugu, 2002) by using proxies of prices of these replacement fuels in OPEC spot oil prices and Henry Hub (HH) spot gas prices. The study finds a significant relationship between the variables. When optimally lagged data are analysed in a vector autoregressive model, a significant longer-term cointegrating relationship is found together with spot OPEC oil price exogeneity. Despite the market inefficiency in cartel driven oil prices and in gas markets that are lacking in global development, as well as statistical problems with the data, a party to party bargaining model using such global price benchmarks is feasible for the future, provided cartel or cooperative behaviour among gas producers is avoided.
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