Impact of oil Price on Futures and Spot Markets of Commodities in Pakistan (A Comparative Study)

The study finds out the impact of oil price on futures and spot prices of four commodities including crude oil, gold, rice and wheat. Tests of correlation and regression are used. The results are then subject to comparison to find which of the two markets (futures or spot) is less sensitive to oil price. The results indicate that futures market of commodities is less sensitive to the oil price than spot/cash market of commodities in Pakistan. Comparison between two available markets in terms of their sensitivity to a big economic indicator (oil price) produces valuable results for the beneficiaries.