FINANCIALIZATION OF COMMODITIES BEFORE AND AFTER THE GREAT FINANCIAL CRISIS

More than 12 years after the historical oil price spike, the financialization of commodities and the interaction among different types of commodity investors remain a hot topic. We review the early financialization literature and the main theoretical contributions to understand how market frictions can affect prices and liquidity. We introduce the debate on the de-financialization and offer insights about the multifaceted role of commercial investors in derivatives markets. Last, we show how other research streams, such as the analysis of the shale industry and of other financial derivatives than futures, might complement the view on the financialization of commodities.

Automated summary

More than 12 years after the historical oil price spike, the financialization of commodities and the interaction among different types of commodity investors continue to be a popular research topic. Market frictions are found to impact prices and liquidity, with commercial investors playing a multifaceted role in derivatives markets. Furthermore, analyzing the shale industry and other financial derivatives beyond futures could offer additional perspectives on the financialization of commodities.