May 22, 2008- According to Bloomberg, crude oil's record surge to $135 may be due to a short-squeeze: traders covering wrong-way bets that prices would decline. While prices jumped 2.6% in a week, open interest in contracts, the number of outstanding positions, fell 8.1%. Analysts believe this signals that money is moving out of the oil markets and traders are simply buying up contracts to close their short positions. Crude oil has closed at record highs on 27 days so far, prompting oil experts to say that the move has been due to traders and speculators rather than a shortage of supply.
From the Bull Pen
Those still bullish on oil can use the oil ETF (USO). A pull-back towards the $100 level might seem a more plausible entry.
http://astuk-virtuallystocks.blogspot.com/
$99.57 (05/07/08)
