The globalisation-regionalisation debate in international crude oil markets: old wine in new bottles

摘要

In this paper, a new perspective of testing the globalisation-regionalisation hypothesis in the two international crude oil benchmarks, the European Brent and the American WTI, is proposed. Existing studies have failed to take into account the time horizons in studying the globalisation-regionalisation of two benchmark crude oil markets. This study overcomes the given limitation by testing the correlation and cross-correlation at different time horizons. The results are suggestive that the two benchmark crude oil markets are more globalised at longer time horizons compared to the shorter time horizons. Furthermore, in the recent years, it is found that the two markets have regionalised.