Italian major says the world’s top energy commodity is hostage of hedge funders
Claudio Descalzi, Chief Executive of ENI, Italy’s largest company, is not optimistic about the direction of the oil market, at least in the short term.
“The oil commodity has entered a difficult crisis. There is less confidence also among institutional investors, who normally have long positions and today they have become shorters”, Descalzi said in an interview published in ENI.com, the company website. “In this way space has been given to hedge funds and speculators. Probably they do not believe that OPEC is capable of taking radical initiatives. And today several sub-Saharan African countries are in serious difficulties”
ENI’s CEO told the interviewer, Roberto Bongiorni, that the geopolitical situation around the oil commodity “is explosive”. The situation, he said,“involves several OPEC countries, there is the shadow of U.S. shale gas which still today is facing over-production, and markets increasingly at the mercy of speculation are preventing low oil prices from emerging from a three-year crisis”.
The result, for one of Europe’s top oilmen, is dramatic.“ The moment is difficult, and speculation is strong. There are speculators that are making maybe billions of dollars. It is a market without rules, which is destroying the primary industry and in the energy sector it has burned 470,000 jobs in three years.
Millions of people are affected. Africa is exploding: the lack of diversification of the economies and the absence of wealth distribution is contributing to poverty and to migration flows”.