ZEW Energy Market Barometer - Experts Split Over Regulations on the Oil Markets

The global financial market crisis as well as the spectacular rise and fall in oil prices have ignited a debate over speculation and intensified regulations. This was sufficient cause for the Centre for European Economic Research (ZEW) to question 200 experts from the energy sector, who regularly take part in the ZEW Energy Market Barometer, about speculations and regulations on the crude oil market.

The experts were asked if they expect regulatory measures to reduce speculations on the oil markets. The vast majority, 83 percent, answered in the negative. Around 80 percent even consider regulations unlikely to be executable in the first place. However, when it comes to the question of whether stronger regulations on the oil markets were reasonable, the answers vary considerably. A narrow majority of 52 percent of the experts support stronger regulations while around 48 percent object to increasing control over trade on the oil markets.

"The high share of experts supporting regulations shows, that the vast rise in oil prices up to 145 US-Dollars for a barrel West Texas Intermediate (WTI) last July and the radical decline in prices to slightly more than 30 US-Dollars was not only attributable to economic developments. Obviously many experts assume that speculations have contributed to those ups and downs", says Dr. Tim Mennel, energy market expert at the ZEW. However, the study also shows that, in spite of potential impacts on oil pricing caused by speculations, the chances of stronger regulations are considered pessimistically.

Some 200 academics and industry experts from energy supply, trading and service companies are surveyed on a biannual basis for the ZEW Energy Market Barometer. They are asked to share their expectations regarding short- and mid-term developments in national and international energy markets. The current survey took place in December 2008.

For further information please contact

Dr. Tim Mennel, E-mail: mennel@zew.de