Research On The International Price Linkage Evolution Of Natural Gas Futures And Spot Market In The Three Main Regions

This paper studies the evolution of price linkage in the three regional spot and futures markets of international natural gas.Firstly,this paper discusses the basic economic problems of international natural gas pricing,and the differences between natural gas pricing and common commodity pricing in terms of long-term contracts,government subsidies,market monopoly,etc.Then the pricing mechanism and development history of natural gas in different regions of the world is analyzed.The pricing mechanism of North America and Europe have been based on the price of trading hubs,while natural gas trading in Asia is still generally linked to oil products.Then the economic fundamentals and pricing evolution hypothesis are examined.The evolution history of international natural gas pricing is divided into three stages: "cost related","oil related" and "market related".The conditions of price linkage in the international market are summarized,and the economic logic of the evolution of international natural gas market is analyzed.After that,the development of the international market in the future is deduced.This paper selects monthly price data of three major international natural gas markets in North America,Europe and Asia,using VAR model and VECM model,and conducts an empirical study on the price linkage of the three regions.Finally,the conclusion is drawn: both theoretical analysis and econometric empirical results show that the development of natural gas in supply,demand and transportation(LNG)promotes international market trade of natural gas.The price linkage among the three major regions of the world has been strengthened,showing the development trend of "global integration".