Oil Prices

The Indian economy deregulated its oil price regime and moved from state-administered to market-linked pricing. This study examines the impact of deregulation on volatility transmission between international oil prices and Indian stock markets. The findings show that due to continual interventions in the form of taxation changes and price freeze during elections, not only did the short-term spillover of oil prices on stock markets strengthen, but the long-term spillover also continues to remain, despite oil price deregulation. This implies that after moving to market-determined pricing, there should be no tinkering with the oil-pricing mechanism by policymakers to ensure the desired stability in stock markets.

The liquefied natural gas market has been in the state of oversupply since late 2014, resulting in low gas prices. This has prompted LNG traders to reconfigure the market dynamics and the contractual framework between them. Consequently, there is a visible shift from a rigid oil-linked gas price to a flexible gas-on-gas price competition, which has contributed to increased global LNG demand.