Open AccessOil market financialisation and Russian Government budget hedging
Author(s) -
В. В. Бушуев,
И. В. Бушуев,
Д. П. Замятина
Publication year - 2018
Publication title -
strategičeskie rešeniâ i risk-menedžment
Language(s) - English
Resource type - Journals
eISSN - 2618-9984
pISSN - 2618-947X
DOI - 10.17747/2078-8886-2017-6-10-14
Subject(s) - volatility (finance) , government (linguistics) , economics , financial market , monetary economics , financial economics , oil price , business , finance , linguistics , philosophy
Market financialisation radically changes the process of oil pricing and results in increase of price volatility. Normal contango situation in financial markets is favorable for government risk hedging. Optimal hedging strategy depends on derivatives’ market conditions, but the recommended contract is put/spread option. Budget hedging may be beneficial for Government as it permits to include oil price in the process of budget planning more accurately.