Shanghai Crude Oil Futures Increase Spot Market Volatility, Study Finds.
The study looked at how Shanghai crude oil futures affect the spot market from 2018 to 2019. They found that the spot price influences futures price, not the other way around. The financial cycle can make spot prices more volatile, and introducing crude oil futures can worsen this effect. Traders' speculation in the futures market can increase spot market volatility, especially during high financial cycle volatility.