25/03/2015
Pumped billions of dollars betting on the return of oil to rise
Oil index funds investors directing that movement of the market
Supply and demand for oil may be affected by unrest in Libya and the number of US rigs operating and production plans of OPEC, the chances of reaching a nuclear deal with Iran, but oil traders have begun in recent weeks also closely follow individual investors.
According to "Reuters", these investors pump and the funds hedge billions of dollars in products indicators when the price drops range last year was betting on the return of oil to rise long after the losses, which provided support was not expected helped to stabilize prices.
Even when kindled concerns about the storage capacity of the United States spark new retreat last week, investors stuck to his point of view that, if falling prices may have reached its limit and pumped more liquidity into the financial products enhanced oil futures contracts.
But there is a danger of liquidation of bets to resume oil prices decline, because of the possibility that falling spot prices, while lack of storage capacity leads to higher costs for forward delivery contracts.
He warns some market participants that happening could push US crude toward $ 20 from about $ 47 currently, according to data from the "Morning Star" for research investment has grown holdings indicators products since the beginning of the year, particularly highly leveraged ones like Velocity iShares wealthy Fund X centers creditor in crude oil.
Analysis of the data flows and weekly shows that investors consolidating positions in a number of procurement funds, while cutting back on positions they took the city over the last four weeks.
Currently holds Fund "Ao.as.o" American oil is one of those products 60 months alpha of futures contracts for crude oil, up more than 10 per cent of all open positions in the US crude contract New York Mercantile Exchange.
But in light of the high cost of delivery futures relative to the spot price, investors bear the additional costs when renewing contracts from month to month, while waiting for the market recovery.
For example, when the new fund "Ao.as.o" earlier this month, centers the new contract cost about $ 1.70, which led to the shrinking practically holdings of investors, and starts following the renewal of the Fund on the seventh of April.
Said David Minnie portfolio manager at Boone Pickens Fund amounting billion dollars, "BP Capital," that if investors are unable to sustain their positions, taking advantage of price fluctuations, they may come out a departure collectively, what would push the price, and I think that to some degree, at least we'll see some the owners of the sunken centers waving the white flag.
He expressed director John Hyland "Ao.as.o" skeptical that such funds fund is to be the driving force of the oil market as a whole, and wondered how a bullish long positions, contracts to be an engine for the market and not someone else bought the city centers?
While such "Ao.as.o" boxes high cost may be for individual investors, the hedge funds and other indicators may use products as a way to manage the process of their exposure to the oil market in the short term.
Hyland pointed out that about three-quarters of the investors in the fund are the hedge funds and other investment windows and they are very aware of the costs, risks, and use "Ao.as.o" to deal in the futures market without resorting to broker derivatives, and about 20 per cent of them walk in and out of the Fund's daily .
