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| Today: 09 February 2010 Time: 08:26 PM |
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| Speculators back to oil market -- Kuwaiti oil official |
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| Power & Materials 6/10/2009 1:50:00 PM |
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By Ahmad Hajjaji
KUWAIT, June 10 (KUNA) -- Recent increase in prices of oil could partially
be attributed to the return of speculation action to the market amid
indications of a start of a global economic recovery, an oil official told
KUNA Wednesday.
Assistant Oil Undersecretary for Economic Affairs Nawal Al-Fzei' told KUNA
the speculators are emboldened by expectations of further price hikes soon and
said their effect is considered among the non-essential factors affecting
prices.
However, speculation is not alone responsible for the spikes of prices to
the USD 70 per barrel range. The official said higher demand for crude oil
from such thirsty economies as that of China and signs of global economic
recovery are also among factors at play.
More demand for light products including plane and auto fuels, particularly
in the US in the summer, is also a factor, as is the recent output cut of 4.2
million barrels per day by the Organization of Petroleum Exporting Countries.
One more factor is the weakening US greenback as the world oil prices
usually go in the opposite direction of the exchange rate of the US dollar.
Regarding stockpiles, the official said there is a strategic stockpile held
by sovereign states and then there is a stockpile companies holds to meet
demand at any given time and through which to attempt to control prices.
In many parts of the world, the second category is showing record levels
due to reduced demand, she told KUNA.
On non-OPEC producers, she said that though they show understanding of
OPEC's role and duty to sustain market stability, they stand to benefit from
price spikes.(end)
ahj.wsa
KUNA 101350 Jun 09NNNN
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