DRIVERS OF OIL PRICE CHANGES - 10-YEAR US TREASURY YIELD SPREAD AND FUTURES PRICE CURRENCY
The paper shows that at present oil prices are determined not on the physical oil market under the influence of supply and demand, but on world financial markets with the participation of «paper» oil markets - cash-settled non-deliverable futures and options. Along with this, the prices are set by major long- term investors adding oil futures to their investment portfolios as a tool to hedge inflation risks. Oil prices are determined exactly by demand for this tool. In addition to inflationary expectations, there is another factor that significantly affects oil prices - futures price currency used by long-term investors to hedge the risks of a fall in the currency of payment - US dollar - during the oil future holding period