Economics and Finance-Risk and Uncertainty in Coal and Oil Markets

Running head: ECONOMICS AND FINANCE RISK IN COAL AND OIL MARKETS
Economics and Finance-Risk and Uncertainty in Coal and Oil Markets
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1ECONOMICS AND FINANCE RISK IN COAL AND OIL MARKETS
Table of Contents
1. Introduction......................................................................................................................2
2. Problem Statement...........................................................................................................2
3. Aim and Objectives of the Research...............................................................................3
4. Justification and Likely Research Outcome....................................................................4
5. Conceptual Framework and Hypotheses.........................................................................5
5.1. Categories of Risk and Uncertainties in Oil and Coal Market.................................5
5.2. Structure of Financial and Economic Risk Management in Oil and Coal Market...6
5.3. Research Hypotheses................................................................................................8
6. Research Methodology....................................................................................................8
6.1. Research Approach and Data Sources......................................................................8
6.2. Data Collection and Analysis...................................................................................9
6.3. Research Structure..................................................................................................10
6.4. Budget, Gantt Chart and Research Activities.........................................................11
References..........................................................................................................................14

2ECONOMICS AND FINANCE RISK IN COAL AND OIL MARKETS
1. Introduction
Interest within the oil and coal-based investments and related financial risk management
has been developing for over the future financial years. Among the most vital energy
commodities is deemed to be the crude oil that is accompanied by increasingly uncertain and
volatile prices. Crude oil is deemed to be a vital aspect of the economic and the business
activities within any economy (Mack, 2014). For this reason, realizing the price movement is
deemed to be necessary for better business and economic decision making by managers within
the oil and coal industry of Australia. In addition, the crude oil, coal along with other energy
commodities has turned out to be among the highly active energy assets within Australia. From
the current publications represented by “International Renewable Energy Agency (IRENA)” it
has been gathered that the energy industry is dealing with the issues related with leaving more
than $10 trillion in the oil, gas and coal along with other associated assets (Mackey & Gass,
2015). Few other reports published by the Australian government revealed that the energy
industry operate on the precarious economic grounds that is experiencing new threats for the
organizations focused on oil, gas and coal fossil fuels.
2. Problem Statement
The major problem based on which the researcher has decided to carry out research on
this topic is focused issues raised by the previous literature. It was gathered that several risks and
uncertainties are faced by the oil and coal industry of Australia as per the report published by
“International Renewable Energy Agency (IRENA)”. Such issues have also been identified from
other publications as referred to declining of oil market in 2014. In addition, over the future years
oil company reserves is deemed to drop by at least $22 trillion that is observed to be equal to

3ECONOMICS AND FINANCE RISK IN COAL AND OIL MARKETS
twice the China’s GDP (Monasterolo et al., 2016). Declining local oil and coal industry is
another concern faced in the energy sector these days. Several government publications on
renewable and non-renewable energy indicated that in the year 2015, more than 94 organizations
operating in the energy sector collapsed and the other 41 energy-based organizations shut down
in the year 2016 (Slee, 2017). In some of the areas within United States it has been gathered that
unsubsidized Solar energy is observed to attain more consideration for the investors as well as
public concern regarding the climate risk requirements that must also be taken into account. Such
risks will also be able to associate the economic risks that are present within the oil and coal
market at the time of increasing investor along with public concern for the climate risk observed
within the fossil fuel industry. The current research is focused on offering vital implications
retarding the present understanding of risk management within crude oil and coal market. The
major scope of this research is to observe the finance and economic risks associated with process
of the crude oil and coal future contracts (Smith, 2017). It also offers analysis of the relationship
between the oil prices and the economic or financial variables. Another factor is persistence that
is present in data and economic oil prices transmission itself.
3. Aim and Objectives of the Research
The aim of the current research that is to be addressed after its completion is to recognize
the uncertainties those are present within the oil and coal industry of Australia along with
analyzing the related risks in finance and economy of the nation. The research objectives that are
to be met in the research are explained under:
 To identify the financial uncertainties that results in increased risks within the coal
market