At this point, data on speculative positioning in oil markets do not suggest that such effects were driving recent market movements, but we cannot rule out that they may have been either a contributing or a mitigating factor. Moreover, we remain alert to the possibility that financial linkages could transmit stress from oil markets to the financial system.
Putting all the pieces together, we conclude that there are two-sided risks around current oil prices: sizable short-run movements in either direction are quite possible. Despite some promising research at the Bank of Canada on forecasting oil prices, the range of uncertainty around even the best forecasts is very wide.