Paper Title
A Development Of A Global Fossil Fuel Market Simulation Model Focusing On Supply Functions

Global energy demand is still increasing with large uncertainty. In order to simulate the global energy market, the estimation of the demand and the supply functions is essential. However, the estimation of the supply functions remains difficult since a supply side behavior is often affected by political events. This study develops a partial equilibrium model which includes the supply, the demand and the market prices of fossil fuels in the global market applying time series analysis, especially focusing on supply functions. The estimated results suggest that the supply regions of crude oil and natural gas consists of three groups in terms of price elasticity, where the first group with positive price elasticity, second one with negative price elasticity and the third one without statistical significant price elasticity. In the estimation of the demand functions, we evaluate the effects of subprime mortgage crisis. The model provides various simulations on the market uncertainties. Keywords- Modeling, Market, Fossil fuel, Coal, Crude oil, Natural gas, Price.