Introduction to Topics on " Uncertainty and Recent Challenges in Oil and Commodity Markets": Papers presented at the fifth International Symposium in Computational Economics and Finance organized in Paris on April 12-14th, 2018 www.iscef.Com.

• Author: Jawadi, Fredj

1. INTRODUCTION

   Over the last decade, commodity markets have experienced high volatility and have shown important changes. For example, the WTI oil price per barrel was about US$58 in 01/2007, US$140 in 06/2008, and US$41 in 01/2009; it reached a level of US$133 in 04/2011, before declining to US$48 in 09/2016, and evolving around US$60 in 2018-2019. This high volatility excess might be explained differently. On the one hand, the oil price increase observed in the aftermath of the recent global financial crisis might be due to diversification strategies practiced by investors, who have massively invested in commodities to hedge their portfolios against the financial crisis shock. On the other hand, regarding the oil price decline after 2014, Hamilton (2018) has associated it to both a demand shock due to the decrease of China's GDP growth rates and the US shale revolution. (1) All things being equal, these recent developments have yielded an increase in uncertainty and pressure on energy prices.

   It is worth noting that uncertainty about commodity prices has always been considered as an important issue, because it might push investors and firms to postpone their investment decisions and their projects (Bernanke, 1983; Elder and Serletis, 2009). In addition, the higher the uncertainty, the more important are the cyclical fluctuations in aggregate investment, yielding less opportunities for the real economy and negative effects on the industrial production and financial markets. Moreover uncertainty about commodity prices has been considered as a major source of asymmetry in the effects of energy prices on the level of economic activity (Mork, 1989; Elder and Serletis, 2009). In this regard, recently, Joo and Park (2016) have shown that oil price uncertainty has negative, symmetrical, and time-varying effect on oil returns.

   The current issue of The Energy Journal provides an overview of recent studies that: i) assess the dynamics of commodity markets, ii) investigate the effects of energy price uncertainty, and iii) and explain the interaction between commodity and financial markets. The issue consists of seven papers presented at the fifth International Symposium in Computational Economics and Finance in Paris on April 12-14th, 2018 (www.iscef.com) as well as an interview with James Hamilton on oil price dynamics.

2. PRESENTATION OF THE CONTRIBUTIONS

   This issue starts with an interview that has been conducted with Prof. James Hamilton in April...