Now Is a Great Time to Lose Everything Betting on Oil Prices
Remember last week, when the price oil was plummeting, causing global shock waves? Yes well that is still happening, but more.
Last week, oil was at a four-year low; today, it fell to a five-year low, and all indications are that it's going to keep on falling, since the underlying situation—too much supply and not enough demand—has not changed yet. Wow, Russia is so fucked! (You, the consumer, will probably be just fine.) How low will oil go? Nobody knows. But will the fact that nobody knows prevent professional investo-gamblers from trying to magically divine the exact low point of the market and make a bundle on it? Not at all. From Bloomberg:
Hedge funds raised bullish bets on Brent crude by 31,303 contracts in the week ended Dec. 2, according to data from ICE Futures Europe. In New York, net-long positions on WTI jumped 14 percent, after falling to the lowest level since January 2013 the previous week, according to Commodity Futures Trading Commission...
"A lot of people are trying to pick the bottom," said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. "It's very risky."
Yes, last week hedge funds flooded into the oil market with bets that oil would rise again, in much the same way that chronic gamblers flood a roulette table with bets after they've gone on a losing streak. In unrelated news, it has not been a good year for hedge funds.
[Photo: AP]