Energy Markets and the Financial Environment

Energy is an essential component of the modern economy, the amenities it offers, and the impact it has on human lives. This thesis focuses on four important topics in energy markets. Some of the main themes and questions that we address are the following. Liquidity of markets is important as it allows more efficient pricing. How different aspects of market liquidity are connected, and what happens during illiquid periods? Does oil price play a role in energy stocks liquidity? Energy assets’ price differences between different locations are an important aspect of market efficiency and integration. Are oil price differences between two main products, Brent and WTI, affected by fundamental factors? Will electricity prices in European countries move closer together with increased cross-border transmission capacity? Economic growth has been closely linked with increased energy consumption. This has also led to more CO2 emissions. What is the contribution of renewable and nuclear power generation to mitigating CO2 emissions?