The Organisation of Petroleum Exporting Countries (OPEC) has blamed speculators for the fluctuation in crude oil price currently being experienced by members in the international oil market.
The comment came as oil prices continued its downward movement, with Brent crude selling for $80 in Asia trading today. West Texas Intermediate was on offer for $77.03 for December delivery.
Speculators reduced their ‘net-long positions’ by almost 50 per cent in August, 2014, said the organisation’s current Monthly Oil Market Report (MOMR).
“This is indicative of the kind of speculation oil markets have had to suffer in recent times,” it said.
OPEC said the actions of speculators “destabilise trading patterns and create uncertainty in the market”, adding that the development had made it difficult for planning needed to enhance the development of the market.
The publication also said that since the financial crisis in 2008, there were moves by regulators to limit the extent of speculation on global exchanges.
“But unfortunately, where there are quick gains to be made, speculation will always be a feature in commodity trading, especially in oil,” it said.
The organisation, however, expressed confidence in the oil market, saying “the high demand of the product round-the-year would remain for the foreseeable future. It might not glitter in its crude form, but oil is undeniably precious.”
It remarked that because of the vital role oil played in nations’ economies, any change in the price of crude often affected consumers and producers.
The publication revealed that since the summer of 2014, OPEC’s reference barometer on international pricing for oil stood around 105 dollars per barrel, adding that “this price was acceptable to consumers, producers and oil companies”.
It maintained that OPEC’s position on the oil market had been continued search for stability to prosper the market, and called for the commitment from all stakeholders to tackle the challenges in the sector.
“A multilateral world quite simply requires a multilateral approach with all parties pulling in the same direction.
“Unilateral actions borne out of self-interest are only unhelpful, but risk-placing us all on a slippery slope,” it said