Oil prices may rise next year

Hedge funds's oil shorts reach 2015 peak, this shows they still expect a further fall in oil prices. However, behind closed door, Saudi officials say that they want oil prices to maintain between $60 and $80 a barrel. Saudi Arabia was the toughest country whose energy minister claimed even if oil "goes down to $20" the country would not change course. Now, the speeches have turned much softer under pressures coming from inside and outside. However, the market still has a strong belief of continuous low oil prices. When Saudi Arabia does not make a clear policy to show the other OPEC countries and the market that it is willing to raise the oil prices, the oil prices will still remain low. The effects of "verbal intervention" will be very limited as Saudi Arabia has damaged many other oil exporters' profits and negotiation will not go very well under such circumstance. Therefore, I expect Saudi Arabia will try verbal intervention later this year but receive very limited response then make a policy change to raise oil prices next year, which I believe will push up oil prices.