Skip to main content

The Three Phases of Oil Financialisation: Advanced Financialisation (2002–2015)

  • Chapter
  • First Online:
  • 461 Accesses

Abstract

This chapter utilises the combination of a historical review with a macroeconomic and financial analysis, in order to create a snapshot of the status of the financialisation of the oil market during the period of advanced financialisation. Developments such as those of the US housing bubble, the subsequent financial and economic crisis, the September 11 attack and the war in Iraq which led to the oil price spike of 2008 are argued in this chapter to have driven a rally in speculative activity deriving from the financial actors who were now able to enter the market freely, and in large numbers, after the regulatory developments of the previous period. This thus demonstrates clearly the advancement of the financialisation process in the oil market, which had now reached the level whereby the capital from other segments of the market could flow freely into that of oil. By now, both the actors and the modus operandi of the financial element of the oil market had reached its maturity and had become a rightful part of the international financial markets system.

This is a preview of subscription content, log in via an institution.

Buying options

Chapter
USD   29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD   44.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Hardcover Book
USD   59.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Learn about institutional subscriptions

References

  • Akerlof, G., & Shiller, R. (2009). Animal spirits. New York: Princeton University Press.

    Google Scholar 

  • Baldwin, R. (2009). Integration of the North American economy and new-paradigm globalisation. CEPR Discussion Paper.

    Google Scholar 

  • Clapp, J., & Helleiren, E. (2010). Troubled futures? The global food crisis and the politics of agricultural derivatives regulation. Review of International Political Economy, 19(2), 181–207.

    Google Scholar 

  • Delong, B., Shleifer, A., Summers, L., & Waldmann, R. (1990). Noise trader risk in financial markets. Journal of Political Economy, 98(4), 703–738.

    Article  Google Scholar 

  • Freund, C. (2009). The trade response to global downturns: Historical evidence. The World Bank Policy Research Working Paper.

    Google Scholar 

  • Hamilton, J. (2009). Causes and consequences of the oil shock of 2007–2008. Brookings Papers on Economic Activity.

    Google Scholar 

  • Hardouvelis, G., & Stamatiou, Τ. (2009). Hedge funds and the US real estate bubble: Evidence from NYSE real estate firms. University of Piraeus.

    Google Scholar 

  • Khan, M. (2009). The 2008 oil price ‘Bubble’. Peter G. Peterson Institute for International Economics.

    Google Scholar 

  • Masters, M., & White, A. (2008). The accidental Hunt Brothers: How institutional investors are driving up food and energy prices. Masters Capital Management and White Knight Research and Trading.

    Google Scholar 

  • OPEC. (2011). World oil outlook. Vienna: Organization of Petroleum Exporting Countries.

    Google Scholar 

  • Organization for Economic Co-operation and Development. (2010). Working Party on Agricultural Policies and Markets Speculation and Financial Fund Activity: Draft Report Annex I. Organization for Economic Co-operation and Development.

    Google Scholar 

  • Portes, R., Dewatripont, M., & Freixas, X. (2009). Macroeconomic stability and financial regulation. CEPR, 178.

    Google Scholar 

  • Stiglitz, J. (2008). Turn left for sustainable growth. Economists’ Voice, 5(4), 1–3.

    Google Scholar 

  • Tokic, D. (2011). Rational destabilizing speculation, positive feedback trading, and the oil bubble of 2008. Energy Policy, 45, 6009–6015.

    Google Scholar 

  • Yergin, D. (2008a). Oil at the breaking point. Testimony before the US Congress Joint Economic Committee. Washington: US Congress.

    Google Scholar 

  • Yergin, D. (2008b). The prize: The epic quest for oil, money & power. New York: Free Press.

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Copyright information

© 2017 The Author(s)

About this chapter

Cite this chapter

Gkanoutas-Leventis, A. (2017). The Three Phases of Oil Financialisation: Advanced Financialisation (2002–2015). In: Spikes and Shocks. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-59461-7_9

Download citation

  • DOI: https://doi.org/10.1057/978-1-137-59461-7_9

  • Published:

  • Publisher Name: Palgrave Macmillan, London

  • Print ISBN: 978-1-137-59460-0

  • Online ISBN: 978-1-137-59461-7

  • eBook Packages: Economics and FinanceEconomics and Finance (R0)

Publish with us

Policies and ethics