• 4 minutes Why Trump will win the wall fight
  • 8 minutes Cuba Charges U.S. Moving Special Forces, Preparing Venezuelan Intervention
  • 12 minutes Maduro Asks OPEC For Help Against U.S. Sanctions
  • 16 minutes Washington Eyes Crackdown On OPEC
  • 1 min is climate change a hoax? $2 Trillion/year worth of programs intended to be handed out by politicians and bureaucrats?
  • 1 hour Solar and Wind Will Not "Save" the Climate
  • 4 hours Some Good News on Climate Change Maybe
  • 5 hours Ayn Rand Was Right
  • 13 hours students walk out of school in protest of climate change
  • 5 hours Expected Breakdown: Israel-Central Europe Summit Canceled After Polish Pullout
  • 1 hour Indian Oil Signs First Annual Deal For U.S. OilIndian Oil Signs First Annual Deal For U.S. Oil
  • 1 day Prospective Cause of Little Ice Age
  • 23 hours L.A. Mayor Ditches Gas Plant Plans
  • 1 day *Happy Dance* ... U.S. Shale Oil Slowdown
  • 4 hours IT IS FINISHED. OPEC Victorious
  • 1 day And for the final post in this series of 3: we’ll have a look at the Decline Rates in the Permian
Jim Hyerczyk

Jim Hyerczyk

Fundamental and technical analyst with 30 years experience.

More Info

Hedge Funds Pull The Rug Out From Under The Market

Hedge Funds Pull The Rug Out From Under The Market

June crude oil futures plunged on Thursday and closed in a position to do further damage to the charts as investor worries over the global supply glut essentially wiped out all of the gains attributed to the OPEC-led plan to cut output, trim supply and stabilize prices.

With crude oil trading lower for the year when OPEC began its ambitious program to fix the crude oil market and below the late November bottom when it first announced it was going to implement such a plan, traders may now have their sights set on the next major bottom from August 2016.

When the dust clears, investors are going to debate whether the OPEC-led plan was actually working, or if aggressive, optimistic hedge and commodity fund money managers were painting the tape and creating a self-fulfilling prophecy because they believed it would work.

I can remember at least three times in March, April and now May when these major players cannibalized their own positions by first slowly eating away at support then dumping positions at the same time when buyers decided to pull the rug out from under the market.

The type of trading we’ve seen in crude oil this year strongly suggests that the “Herd Theory” is alive and well. Given all the technical and fundamental data available, it’s hard to conceive that the money managers just followed each other into the pit, not once, but at least three times this year. They may have spread the buying all around while the crude…

To read the full article

Please sign up and become a premium OilPrice.com member to gain access to read the full article.

RegisterLogin



Oilprice - The No. 1 Source for Oil & Energy News