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Int. J. Financial Stud. 2018, 6(4), 89; https://doi.org/10.3390/ijfs6040089

The Lead–Lag Relationship between Oil Futures and Spot Prices—A Literature Review

1
Economics Department, Moravian Business College, 779 00 Olomouc, Czech Republic
2
Finance, College of Business, Dublin Institute of Technology, D02 HF72 Dublin, Ireland
3
School of Business, Maynooth University, 9CH3+W7 Kildare, Ireland
*
Author to whom correspondence should be addressed.
Received: 22 September 2018 / Revised: 21 October 2018 / Accepted: 26 October 2018 / Published: 31 October 2018
(This article belongs to the Special Issue Energy Finance)
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PDF [425 KB, uploaded 31 October 2018]
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Abstract

Crude oil is the dominant energy resource worldwide. The focus of this paper is on its historical behaviour and subsequent implications for the global economy with an emphasis on the lead–lag relationship between spot and future prices. The paper examines the behaviour of oil spot and future prices and their determinants during periods of market uncertainty, particularly in the context of economic and financial crises. The analysis highlights a key controversy within the extant literature, as to whether spot or futures prices are the main crude oil price indicator. The literature review indicates that the lead–lag relationship is a dynamic one, especially during periods of sustained uncertainty, which leads to significant disagreements and incongruities among researchers regarding the price that plays a dominant role. View Full-Text
Keywords: energy; crude oil; lead lag relationship; crises; literature review energy; crude oil; lead lag relationship; crises; literature review
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Zavadska, M.; Morales, L.; Coughlan, J. The Lead–Lag Relationship between Oil Futures and Spot Prices—A Literature Review. Int. J. Financial Stud. 2018, 6, 89.

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