(MENAFN- Arab Times) Nothing has changed since the decline in oil prices from the end of last November. The oil market is supersaturated with supply from everywhere and surplus of over 2 million barrels. No one has reduced the throughput but the prices are increasing to almost $62 per barrel.

Who is responsible for this increase in oil prices? We know that all small and big oil companies are cutting down their production activities reducing their headcounts and minimizing their oil projects. However such actions cannot be the factors that led to the sudden rise in oil prices as their impacts are usually reflected on long-term basis. Therefore it is probably the financial houses institutions and oil-trading companies that are playing with the oil market for speculative gains.

The bankers international oil companies and financial institutions are playing with the daily oil paper by large amounts of oil much above the current global demand of 2-3 million barrels merely to mess with the prices by increasing and decreasing them for a while. This is part of their speculative characteristics as there is no fundamental economic reason behind the current rise in the oil prices. It seems everyone is playing with the paper oil markets for the sake of earning huge profits but under the absence of any regulations proper monitoring and transparency in reflecting the actual oil market.

The American market has a huge amount of oil with more than 400 million barrels in onshore storage and about 50-100 million barrels stored in large crude oil tankers in the middle of the sea. Inspite of this the oil prices are increasing. In addition the current oil production of about 9.400 million barrels a day may increase if the oil prices continue to increase. Such an increase could be short-term for regulating the oil prices or may be for the oil prices to reach a real low by middle of next year. As we said before any improvements in the oil prices are aimed for the most expensive oil irrespective of whether it is shale oil sand oil oil extracted from deep waters or that from the arctic region.

Therefore in order to bring stability in the market non-OPEC oil producers particularly Russia must cut down their production. Let us not forget that the current oil price of about $60 is most suitable for the minority among the OPEC countries such as Saudi Arabia Kuwait United Arab Emirates and Qatar as they will end up with surplus by the end of their respective fiscal years. Analysts and financial houses can speculate as much as they want but they will end up hurting the oil-consuming countries and not the oilproducing ones. The Western government is responsible for tightening their regulations and determining the main culprit in this busines

By: Kamel Al-Harami Independent Oil Analyst