VOL. XLV

No 10

11-March-2002

OPEC

SpeculationDecouples Oil Prices From Market Fundamentals

Crude prices soaredon 7 March, with WTI reaching $24.75/B at one point during the day, drivenlargely by hedge fund speculation. Yet market fundamentals did not support aprice hike, and the speculators maneuvers have temporarily decoupled pricesfrom the reality of the supply/demand balance. Earlier in the week prices werealready climbing: while Russiadeclined to commit to extending its production cutbacks...