Reprint Number 172
Volatility in Natural Gas and Oil Markets
by Robert S. Pindyck, The Journal of Energy and Development Vol. 30, No. 1, (2004).

This paper examines the behavior of natural-gas and crude-oil price volatility in the United States since 1990. Prices of crude oil and especially natural gas rose sharply (but temporarily) during late 2000, and natural gas trading was buffeted by the collapse of Enron in late 2001, suggesting to some that volatility in these markets has increased. Whether or not this is true, volatility has been high and (like prices themselves) fluctuates dramatically.