Well, the conventional story is that it's a nice warm winter but . . . . . here's the real reason : from the NY Post . . .
"It might be a better idea to thank Goldman Sachs, not the weather, for the recent plunge in oil prices. While recent balmy temperatures have certainly played a role in last week's dip in oil prices, a lesser known, but equally powerful, move by Goldman at the start of the year might bear some responsibility as well.
Goldman cut the energy portion by as much as 50 percent in some of the sub-indexes that comprise the widely followed Goldman Sachs Commodity Index, tamping down moves to buy them by large investment funds who mimic Goldman's index.
The changes took effect this month and apply for all of 2007, a Goldman spokesman said. Crude oil futures plunged 9 percent Wednesday and Thursday to $55 a barrel, before settling Friday at $56.31. The two-day decline was the sharpest since December 2004.
The GSCI is influential because large institutional investors like pension funds and endowments invest according to its allocation model."
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Fiddlers 20 from Fiddler magazine
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[image: fiddlers20_th]Fiddler magazine has come up with a unique way to
celebrate their 20th year of publishing. They have released a retrospective
CD/book...
10 years ago
1 comment:
I suspect hedge funds are dampening demand for new front month contracts because they have been losing steadily month by month each time they roll thier positons forward. cost of next month contract is relativley expensive now. cascade effect. price is great when they are adding to thier positions but when they flee opposite is true. future unpredictable. stay tuned for geo political events. good news is that world economies still expanding and oil use rising (I think).
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