Abstract
This study investigates the dynamic trading network structure of the international crude oil and gas market from year 2012 to 2017. We employed the dynamical similarity analysis at different time scales by inducing a multiscale embedding for dimensionality reduction. This analysis quantifies the effect of a global event on the dependencies and correlation stability at both the country and world level, which covers the top 53 countries. The response of China’s trading structure toward events after the unexpected 2014 price drop is compared with other major traders. China, as the world’s largest importing country, lacks strong stability under global events and could be greatly affected by a supply shortage, especially in the gas market. The trend of multi-polarization on the market share gives a chance for China to construct closer relationships with more stable exporters and join in the trade loop of major countries to improve its position in the energy trading networks. The hidden features of trade correlation may provide a deeper understanding of the robustness of relationship and risk resistance.
Highlights
It has long been the interest of academy and industry to research on the world market of energy, especially the crude oil and natural gas
We presented a framework of the dynamic structure analysis over time by the dynamical embedding of complex networks, which is an extension of the heat kernel embedding
We focused on its applications to dimensional reduction and the detection of dynamical modules to highlight both intrinsic and induced features of world crude oil and gas trade networks
Summary
It has long been the interest of academy and industry to research on the world market of energy, especially the crude oil and natural gas. Literature has investigated the economic impact of oil price shocks, including the response of economic growth, inflation, and stock markets in oilimporting and -exporting countries (Zhao and Chen, 2014; An et al, 2018; Gong and Lin, 2018; Youssef and Mokni, 2019). Recent developments in the energy market have discussed the role of oil prices in determining trade balances, international risk sharing, and long-standing country policy (Filis and Chatziantoniou, 2013; Aydoğan et al, 2017; Youssef and Mokni, 2019). Literature investigating the dynamic interconnections among energy markets has emerged over the last two decades for the changing world energy market (Badel and McGillicuddy, 2015; Baumeister and Kilian, 2016a; Xue et al, 2019)
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