The variability of prices can also be explained with a bit market segmentation.

Assume 100 demand and 100 supply. 90 of the demand and 90 of the supply are subject to long-term contracts. Demand rises by 5 (at the old price).

This demand increase by 5 is not a 5% increase, but a 50% increase because the short-term market has only a volume of 10.

The effect in this model is an out-of-proportion price spike that gradually subsides as long-term contracts end and their share is temporarily added to the market volume - till finally the demand hike by 5 is really just a 5% hike.