A GAME of cat and mouse appears to be taking place in the oil market. The felines are big producers who want prices to go higher, the rodents speculators betting that they will fall. Twice this year, in the first quarter and the third, hedge funds and others have taken out record short positions on futures of West Texas Intermediate (WTI), an American crude-oil benchmark, only to be mauled by (so far empty) talk among members of the OPEC oil cartel and Russia of a production freeze. The resulting scramble by funds to unwind their short positions has fanned a rally in spot oil prices (see left-hand chart).

This reminds Ole Hansen, head of commodities research at Denmark’s Saxo Bank, of currency intervention by central banks. It often works best, he says, when speculators are positioned heavily in the opposite direction. He mischievously pictures Saudi Arabia’s deputy crown prince, Muhammad bin Salman, watching a screen on his desk each week when America’s Commodity Futures Trading Commission (CFTC) reports speculative positions, poised to pounce.

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