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9th Joint IEA-IEF-OPEC Workshop on the Interactions Between Physical and Financial Energy Markets

Spot and paper markets: divergent trends amid low liquidity in futures markets

27 April 2023, Vienna, Austria


The 9th Joint IEA-IEF-OPEC Workshop on Interactions between Physical and Financial Energy Markets will be held via hybrid format on 27 April 2023.

This unique, high-level technical event brings together a diverse range of market participants to enhance understanding of the complex and evolving inter-linkages between the physical and financial energy markets.

The Workshop is part of the trilateral work program established by the three organizations and endorsed by Oil and Energy Ministers at the 12th International Energy Forum (Cancún, March 2010). In 2015, the Joint Workshop was recognized by the G20 Energy Ministers who in their first Communiqué welcomed "the joint work of the IEA, IEF and OPEC to further understand energy outlooks and the interaction between physical and financial markets and encourage them to continue their fruitful collaboration on market transparency".

To stimulate an open and informative discussion, the Workshop is held under the Chatham House Rule, and participation is limited to key market participants on the financial and physical sides of the market, regulators, academics, high-level technical experts, as well as technical delegations from the organizers respective member countries.

Discussion Questions

Session I: Factors driving volatility in the energy-related financial markets

  • What are the current factors driving volatility in the energy-related financial markets?
  • What are the factors reducing market liquidity and what impact is this having on future market volatility and price discovery? What role have margins calls played?
  • How have the activities of market participants, such as hedgers, money managers and index traders, impacted market functioning in particular in terms of price discovery and volatility?
  • How have recent developments in other asset classes, such as equities and the currency markets, affected the paper oil market and other commodity markets?
  • What impact have recent sanctions and price caps likely to have on the oil market volatility?

Session II: Impact of physical and paper oil interactions on market functioning and price discovery

  • How have the energy-related financial markets evolved in recent years, in terms of structure, size, participants, financial products and their functioning?
  • What is the importance of OTC markets to the price discovery process and has the recent volatility undermined their liquidity or utility?
  • How has the increased cost of hedging in the paper markets affected market activity and stability?
  • What impact does the structure of the futures market have on price behaviour? How has the liquidity in the far-forward months evolved and who holds these positions? How does this activity influence front-month prices?
  • What impact do activities such as Algo-trading, CTAs and ETFs have on market functioning and price discovery?

Session III: Ensuring adequate financing to sustain oil and gas developments

  • As traditional structures realign coming out of the global impact of the COVID-19 pandemic, how does this affect commodity markets and oil?
  • Who is financing commodity market development today? What is the role/size of banks, of private equity and of the firms themselves in terms of financing fossil fuel projects? How has that, and will that, change?
  • Is the competition to invest in minerals, renewable energies and other sectors competing financing away from the oil sector? What is happening in the IECs (International Energy Companies)?
  • How much have factors such as inflation, supply chain challenges and ESG policies increased the cost of capital to the oil and gas sector and undermined the capital investment budgets?
  • Is ESG an impediment to investment in the oil and gas sector?
  • What are the implications to safeguard security of supply in order to meet oil demand?

Speaker Presentations

Key Documents

Previous Workshops

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