The Difficulty to Stabilize Energy Markets

Energy is one an important class of traded commodities. The particular feature of energy is that about 85% of energies consumed are produced from non-renewable sources. While the structure of energy market is complex, in general we have competitive markets. Some exceptions like OPEC cartel in fact work now towards stabilization of market for oil, with periodical adjustment in production to keep prices within acceptable corridor. It is important to understand that not only real energy but also paper energy (like future contracts and options) are traded. The aim of the article is to analyse the main recent events to understand the specifics of energy markets and macroeconomic externalities derived from price instability, as well as to point towards some solutions to stabilise markets and trends within the current economic crisis.