Price convergence across natural gas fields and city markets

Journal Article · Sat Dec 31 00:00:00 EST 1994 · Energy Journal

OSTI ID:237580

Walls, W D ^[1]

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1. Univ. of Hong Kong (Hong Kong)

This research reports the results of cointegration tests between natural gas spot prices at various production fields, pipeline hubs, and city markets. Cointegration between prices is evidence that spatial arbitrage is enforcing the law of one price across market locations. The results show that prices at certain city markets, Chicago and to a lesser extent California, are cointegrated with prices in field markets. However, the prices at most other locations do not move in step with gas prices in the field markets. Customer access to pipeline transportation, or competitive bypass, may explain why prices at some city markets are more responsive to production field prices than others. 15 refs., 2 tabs.

• OSTI ID: 237580
• Journal Information: Energy Journal, Vol. 15, Issue 4; Other Information: PBD: 1994
• Country of Publication: United States
• Language: English

Related Subjects

03 NATURAL GAS
NATURAL GAS
PRICES
SPOT MARKET
NUMERICAL DATA
ECONOMETRICS