Oil producing countries like Nigeria might start smiling again as the newest data from the U.S. Commodity Futures Trading Commission, which records transactions from investors in future commodity prices, shows hedge fund managers bet on rising oil prices.
The West Texas Intermediate (WTI), a benchmark for oil prices, has increased by 30% since reaching its lowest value over the last six years in March 2015. One indicator for hedge fund managers that oil prices might further increase in the future is the expected decrease in oil output in the United States, because U.S. drillers are using the fewest amount of oil drilling rigs since 2010, according to an article on Bloomberg.
The International Energy Agency expects US oil production to decrease from June to September, which might positively affect global oil price indices.
The increased output from the United States in 2014 and beginning of 2015 was one of the reasons why the price for oil on global markets collapsed.
Especially Nigeria, whose biggest consumer of crude oil is actually the United States, not only sold lower quantities, but at lower prices as well. The United States have also introduced a new way of generating more oil in a practice called fracking, where a chemical is injected into rocks to further widen the space to have a better access to oil.