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July 11, 2005
Oil market comes to the rescue of loss making Hedge Funds
Much hedge fund activity has been seen in the oil market in the last one month. Perception is that hedge funds are being pulled towards the oil market in order to cover up the losses incurred in the stock market. Fluctuations of the U.S. dollar and drop in credit ratings of General Motors and Ford are seen as major culprits in the hedge funds making losses lately. Slight recovery was observed after the funds entered the oil market. Therefore the international oil market has seen a phenomenal rise in speculative funds. Just to give an idea, in June, the net long positions increased by over 15 times. Analysts feel that the oil will continue to attract speculative funds. Wall Street Journal went on to state that these days Oil is being traded more or less like stocks. English.donga.com reports:
“Experts are predicting that hedge funds will remain in the oil market for a while as it could be difficult for them to find an investment target with a higher profitability than oil futures this year"
Read More: Hedge Funds Aggravate Oil Price Hikes
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