Oil prices, along with related exchange traded funds (ETFs), are steadily climbing up and oil-producing countries are left baffled.
The price of oil is at around $58 a barrel, but the underlying data does not really warrant the higher prices, writes Jay Yarow for The Business Insider. The rise in prices does not correspond with our current economic conditions, and the U.S. oil supplies is at 375.3 million, a volume last seen in 1990.
Members of OPEC are agitated by this result and they are worried that the oil prices may be attributed to speculation and not just increased demand.
OPEC ministers are scheduled to convene in Vienna on May 28, reports Tahani Karrar for The Wall Street Journal. They will be discussing the possibility of speculations in the oil market and what their response will be. It is agreed that the likelihood of cutting or holding their output is “still too early” to tell.
Mideast oil ministers have been calling for tighter regulation of oil futures trading. They asked national authorities to limit market speculations and introduce position limits in the futures markets.
- United States Oil (USO): down 5.1% year-to-date
- PowerShares DB Oil (DBO): up 11.2% year-to-date
Max Chen contributed to this article.