Spikes and Shocks (eBook)

Angelos Gkanoutas-Leventis is a political economist with commercial experience working for national and international oil companies. He is very active in the development of the hydrocarbon industry in the South East Mediterranean, having founded the Greek Energy Forum. He is also a member of the City Political Economy Research Centre (CITYPERC). 

Spikes and Shocks 3
Acknowledgements 5
Contents 7
List of Figures 10
List of Tables 11
1 Introduction 12
Reference 20
Part I Conceptualising Financialisation 21
2 The History of the Oil Market until the 1980s 22
References 31
3 The Many Faces of Financialisation 32
3.1 The Systemic Perspective: Regimes, Capital and Financial Geography 36
3.2 The Institutional Perspective: Looking beyond the Real Production–Financial Profit Nexus 40
3.3 Could the Institutional and the Systemic Approaches be Bridged? 43
References 44
4 Finance and the Oil Market: Introducing a Comprehensive Approach to Analysing the Financialisation Process 47
4.1 Analysing Financialisation: Financial Economy vs Real Economy, Conceptualising Performativity and the Emergence of New Financial Actors 50
4.1.1 Performativity and Performative Cycles 52
4.2 Analysing Financialisation: Behaviour of the Financial Actors 57
4.2.1 The Behavioural Finance Approach: From the False Sense of Control to ‘Mob Psychology’ 60
4.3 Analysing Financialisation: The Role of Technology and Regulatory Evolution 63
Note 68
References 68
Part II The Three Phases of Oil Financialisation 71
5 Oil Products and Oil-Based Financial Products 72
References 75
6 Oil Shocks as Barometers of the Financialisation Process 76
6.1 Oil Shocks and Macroeconomic Performance 77
References 82
7 The Three Phases of Oil Financialisation: Early Financialisation (1980–1999) 83
7.1 Macroeconomic Background 83
7.2 The Oil Price Spike Effects 85
7.3 Financial Dimension of Oil Markets: The Emergence of Oil Futures and Swap Investments 86
References 89
8 The Three Phases of Oil Financialisation: Low Financialisation (1999–2002) 90
8.1 Macroeconomic Background 90
8.2 Technology and Regulation: The Three Factors that Changed the Oil Market 94
References 96
9 The Three Phases of Oil Financialisation: Advanced Financialisation (2002–2015) 97
9.1 Macroeconomic Background 97
9.2 The 2008 Oil Price Shock and the Role of Speculative Financial Activity 101
9.3 Independent Variables Shaping the Market Dynamics 105
9.3.1 Drivers behind Speculation on Oil Markets 106
References 109
Part III Financialisation of Oil Market and Evolution of Oil Market’s Actor Structure 110
10 Financialisation of the Oil Market: The Four-Actor Structure 111
10.1 The New Group of Actors on the Oil Market: Characteristics and Behaviour 114
10.1.1 Speculative Behaviour of New Market Actors 123
10.2 New Financial Market Players Transforming the Oil Market: Oil Spot Prices and Futures Prices in Focus 127
10.2.1 Expectations and Behaviour of the Financial Actors 131
References 137
11 Epilogue 140
References 149
Index 151