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An energy market is a type of commodity market on which electricity, heat, and fuel products are traded. Natural gas and electricity are examples of products traded on an energy market. Other energy commodities include: oil, coal, carbon emissions (greenhouse gases), nuclear power, solar energy and wind energy. Due to the difficulty in storing and transporting energy, current and future prices in energy are rarely linked. This is because energy purchased at a current price is difficult (or impossible) to store and then sell at a later date. There are two types of market schemes (for pricing): spot market and forward market.[1]
Typically, energy development stems from a government's energy policy which encourages the development of an energy industry specifically in a competitive manner (as opposed to non competitive).
Until the 1970s when energy markets underwent dramatic changes, such markets were characterized by monopoly-based organizational structures.[2] For instance, most of the world's petroleum reserves were controlled by the Seven Sisters. In the case of petroleum energy trade, circumstances then changed considerably in 1973 as the influence of OPEC grew and the repercussions of the 1973 oil crisis affected global energy markets.
- ^ Edwards, DW (1 November 2009). Energy Trading and Investing: Trading, Risk Management and Structuring Deals in the Energy Market. McGraw Hill Professional. pp. 1, 43. ISBN 9780071629072. Retrieved 6 February 2023.
- ^ Andrei, Konoplyanik (2004). "International Energy Markets". In Barton, Barry (ed.). Energy Security: Managing Risk in a Dynamic Legal and Regulatory Environment. Oxford University Press. p. 49. ISBN 0199271615. Retrieved 27 June 2013.