When the dollar drops, traders in financial markets move to futures commodities markets, the most important of which is oil. This was clear last summer, when oil prices hit $147 a barrel, without this being tied to market factors, namely supply and demand. There was enough supply, and prices continued to rise despite OPEC's increase in production. Today, as the economic crisis continues to affect the entire world and despite the G-20 leaders' steps to revive the economy, the structure of financial markets has not changed very much. At the beginning of this month, oil prices began to rise to $60 a barrel, without this being linked to what was happening in the market. Supply continued to outstrip demand, which experienced a slight improvement. Saudi Arabia's oil minister, Ali al-Nuaimi, says that the improvement in prices reflects the traders' expectations that demand will improve, in line with the global economic recovery. He adds that no one can predict the future of oil prices, and in which direction they will move. However, we can notice what happened in the summer of 2008, when prices reached $147 a barrel. Traders in futures markets shifted from securities to commodities, particularly oil, which led to a strong rise, even though supply was sufficient and market factors were completely balanced. This approach led to the price of oil reaching these levels, which OPEC did not want. This is because it realized the negative impact on the international economy, as well as on the organization's interests. For such a situation speeds up the search for alternatives to oil. Today, we see that the structure of financial markets has not changed very much, despite all of the financial collapses, from banks to hedge funds and other financial institutions. Speculators and traders are still there, and OPEC's power to prevent the price of oil from remaining at a level below $50 a barrel has rendered speculators more interested in turning to other commodities. When OPEC reduced its production, in order to halt a price slide to $20-30 a barrel, which is what made the Kingdom of Saudi Arabia produce less than 8 million barrels a day (it now has, according to al-Nuaimi, a surplus of 4.5 million barrels, as protection for the price level), OPEC has proved its ability to set a limit to the price collapse. This ability has convinced traders in financial markets that oil is a guaranteed asset that should be resorted to; moreover, states will return, sooner or later, to the inevitable consumption of oil, with the beginning of the global economic recovery. Last summer's speculation in oil prices could happen again, with the shift in the futures markets to oil. This is especially the case as the weak dollar, which affects the international economy, will strengthen the conviction of traders that oil is a surer bet, since OPEC is a guarantee that the price will not collapse. Of course, this is a double-edged sword for OPEC, which does not want price fluctuations, whether up or down, like what took place, and not a collapse. This was affirmed by the Saudi monarch, King Abdullah bin Abdul Aziz, when he said that the fair prices of oil would be $75 a barrel. For his part, the Saudi oil minister said on Monday in Rome that at the end of the day, the price level would reach $70-80 a barrel. However, he affirmed that it was important for it to remain at this level. Saudi Arabia wants stable markets and stable oil prices at an acceptable level. However, futures markets look toward profits and fluctuations. This is dangerous and beyond the control of OPEC. In truth, we cannot predict the future price of oil, because the structure of financial markets has not changed, despite all of the measures taken by industrialized countries.
