The physical oil market has already reached the point of balance in the world, and today’s fluctuations in oil prices are related to the desire of major financial market players to obtain profits. This statement was made by Associate Professor at RANEPA, Ivan Kapitonov, in an interview with a Vestnik Kavkaza correspondent. According to him, the rise in world oil prices on the back of a possible meeting with the participation of the OPEC countries to discuss the production freeze in spite of the fact that hedge funds increase betting on the fall of the WTI oil, increasing short positions.
"We cannot completely realize all ups and downs of the games of big players in the financial market. Bear tendencies have prevailed over the market. At the same time the physical market is fairly balanced, the balance has already been reached there. Other things take place due to a number of third party factors,’’ he explained.
According to his forecast on the prospects for a possible meeting of the OPEC countries, Kapitonov said that the meeting itself is very likely, but the members of the cartel won't agree to reduce production because it would require a decision of other market players, non-OPEC countries, which is not observed now.
Senior analyst at Uralsib Aleksey Kokin pointed out that the increase in oil prices is spurred now not only by reports of a possible OPEC meeting, but with the help of buildup of short positions that are closed as soon as good news or just rumors come.
"In fact, I think this is a temporary phenomenon, as there has never been any freeze and never will, as main players are not interested in it. The situation has not changed significantly in comparison with the beginning of the year,’’ he enoted.
