The impact of international market effects and pure political risk on the major western oil and gas stock market sectors

A key question in European integration is whether or not the global oil and gas market sector (over the period which includes the oil price hikes of 2001 to late 2007 and the global financial crisis from mid 2008 to early 2009) has been impacted to a greater or lesser extent by major Western country oil and gas stock market sectors (such as, those in the USA, the EMU and the UK) as well as political, social and legal factors (embodied in political risk ratings) for the USA, the UK and the key economies of the EMU (that is, France, Germany and Italy). This short study uses analysis of both unlagged and lagged data in multivariate models to test these relationships and finds a closer relationship politically and financially between the USA and the UK than between the EMU and the UK markets. The EMU and the major EMU countries considered separately in oil and gas market sector movements and political risk ratings movements have very little financial and political influence on the movement of the global oil and gas market sector over the period.