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Oil Goes Vertical
David Gaffen, MarketBeat (Wall Street Journal blog)
Every month or so it’s nice to look back and see how far the oil market has come. After all, crude-oil prices have doubled from this time one year ago. After a steady, meandering move through the middle of the decade through to 2005, crude’s pace has quickened, never more so than in the last few months.
Some believe the contract has hit the parabolic stage of the uptrend – where prices are driven nearly vertical, something that has occurred in many a stock, index, or commodity over the years.
… Mr. Alexander says the sharp upward surge in crude of late is suggestive of more people jumping in to bet on it continuing. It won’t continue, he says. “When gold topped out recently it cratered, and oil is going to do the same thing – but you don’t know where it’s going to start from,” he says.
(22 May 2008)
Is $130 oil a bubble?
Steve Hargreaves, CNN
Oil prices have doubled in the past 12 months, surging nearly $8 a barrel in the past four days alone.
Big investment funds are putting money into oil futures as if Saudi Arabia’s spigots will run dry tomorrow. At the same time, the supply of oil and the demand for it hasn’t changed much in the last year.
So it raises the question: Is $130 oil nothing more than one big bubble?
(23 May 2008)
Slick investors strike riches as they cash in on peak oil
Louise Armitstead, UK Telegraph
Retail investors have joined a raft of hedge funds and pension funds in making millions of pounds by cashing in on the oil crisis.
Thousands of individual investors have piled into oil futures and have made as much as 200 per cent returns as the oil price soared to record highs in recent weeks.
Last week oil prices jumped 7 per cent, breaking three records and touching $135 a barrel on Thursday on new fears that supply is outstripping demand.
Clive Cooke, chief executive of City Index, the financial spread betting firm, said: “We’ve seen a big switch into oil – it is now by far the biggest trade at the moment.”
(25 May 2008)
