NEW DELHI: Crude oil prices continued to trend higher for the second consecutive fortnight in a row, as Brent rose more than 7.5 per cent while WTI gained 10.10 per cent over the same period.On MCX , oil prices have risen by around 11.85 per cent in the same time frame.The rally in oil prices is triggered by a combination of factors such as increased optimism that prices may have bottomed out and also increased speculative behaviour by fund managers.Oil prices have been in the negative territory for two years in a row. The oil market has been in a situation of over-supply and low demand. This tug of war in prices between the Opec nations and the US shale gas companies started when the Opec countries wanted to gain market share. In order to do this, they started producing more so that the shale produces go out of business This resulted in a situation of oversupply and low demand. Slow growth in China only added fuel to the fire. Hence, the meeting of the Opec and non-Opec producers gained significance.The meeting of Opec and non-Opec producers in Doha on April 17, wherein the attendees were from about 20 countries including Russia, Saudi Arabia, Qatar, Venezuela , Algeria, Angola, Azerbaijan, Colombia, Ecuador, Indonesia, Iraq, Kazakhstan, Kuwait, Mexico, Nigeria, Oman and the United Arab Emirates. This meeting was a complete failure as the oil producers did not come to any conclusion on cutting oil output.In addition, Iran decided not to attend the meeting, as western sanctions took a toll on the overall economy . Besides, it was not in favour of cutting crude output.Since a glut continues to persist in the oil market, it will be a difficult to take a call on how the demand side will pan out in the rest of 2016. Saudi Arabia needs a barrel of oil to fetch $85 to finance its public spending and $60 to keep its current account balance.America has sustained production at above 9 mbpd despite a sharp drop in the number of oil rigs, suggesting that shale firms are becoming more efficient. Hence, oil prices have to rise in order for Saudi to maintain its budget balance, whether US producers remain in business or not is a secondary question.The speculative behaviour in the oil market, however, suggests that hedge funds and money managers are bullish on crude prices. As of April 19, 2016, money managers were net longs on crude at 237,640 contracts compared with net longs of 63,175 contracts as of February 23, 2016.We expect oil prices to rise further over the next fortnight. WTI oil prices (CMP:$43.06/bbl) can move higher towards $46 a barrel and Brent (CMP: $44.5/bbl) towards $49 a barrel. On MCX, oil prices (CMP: Rs 2,886 a barrel) can move higher towards Rs 3,150 a barrel.(Naveen Mathur is Associate Director of Commodities & Currencies Business, Equity Research & Advisory at Angel Broking. He analyses the crude oil market every fortnight in this space. Views expressed in this column are his own and do not represent those of ETMarkets.com)