Hedge funds raised bullish bets on oil by the most in eight weeks on concern that political unrest in Egypt will spread and disrupt supplies from oil-producing countries in the Middle East.
The funds and other large speculators increased net-long positions, or wagers on rising prices, by 17 percent in the seven days ended Feb. 1, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report. It was the largest gain since the week ended Dec. 7.
Demonstrators in Egypt demanded the resignation of President Hosni Mubarak, who has ruled for 30 years, while police in Yemen used tear gas against crowds on Feb. 3 and Jordan sacked its government. Middle East and North African countries produce 36 percent of global oil and have 61 percent of proven reserves, according to BP Plc’s Statistical Review of World Energy. Oil in New York has reached $92.84 since the start of the turmoil, the highest level since Oct. 7, 2008.
“It’s all about Egypt,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “The greatest fear in the market is if the unrest spreads to other countries like Saudi Arabia, Kuwait or the Emirates, that could impact crude oil supplies.”
Oil for March delivery advanced by $4.58, or 5.3 percent, to $90.77 a barrel on the New York Mercantile Exchange from Jan. 25 to Feb. 1, the week covered by the CFTC report. Futures dropped $1.51, or 1.7 percent, to $89.03 on Feb. 4 as the army reduced violence in Cairo.
Algeria Emergency
Algeria’s President Abdelaziz Bouteflika said Feb. 3 that a 19-year-old state of emergency will be lifted “in the very near future.” The country produces 1.8 million barrels of oil a day and Yemen 298,000, according to the BP report. Saudi Arabia, the largest producer in the Middle East, pumped 9.7 million barrels a day in 2009.
Concern of disruptions to the Suez Canal sent North Sea Brent crude to $103.37 Feb. 3, the highest intraday level since Sept. 26, 2008. Brent for March settlement fell $1.93, or 1.9 percent, to $99.83 on the London-based ICE Futures Europe exchange on Feb. 4
For more info- http://www.businessweek.com/news/2011-02-07/hedge-fund-oil-bets-surge-on-middle-east-unrest-energy-markets.html
The funds and other large speculators increased net-long positions, or wagers on rising prices, by 17 percent in the seven days ended Feb. 1, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report. It was the largest gain since the week ended Dec. 7.
Demonstrators in Egypt demanded the resignation of President Hosni Mubarak, who has ruled for 30 years, while police in Yemen used tear gas against crowds on Feb. 3 and Jordan sacked its government. Middle East and North African countries produce 36 percent of global oil and have 61 percent of proven reserves, according to BP Plc’s Statistical Review of World Energy. Oil in New York has reached $92.84 since the start of the turmoil, the highest level since Oct. 7, 2008.
“It’s all about Egypt,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “The greatest fear in the market is if the unrest spreads to other countries like Saudi Arabia, Kuwait or the Emirates, that could impact crude oil supplies.”
Oil for March delivery advanced by $4.58, or 5.3 percent, to $90.77 a barrel on the New York Mercantile Exchange from Jan. 25 to Feb. 1, the week covered by the CFTC report. Futures dropped $1.51, or 1.7 percent, to $89.03 on Feb. 4 as the army reduced violence in Cairo.
Algeria Emergency
Algeria’s President Abdelaziz Bouteflika said Feb. 3 that a 19-year-old state of emergency will be lifted “in the very near future.” The country produces 1.8 million barrels of oil a day and Yemen 298,000, according to the BP report. Saudi Arabia, the largest producer in the Middle East, pumped 9.7 million barrels a day in 2009.
Concern of disruptions to the Suez Canal sent North Sea Brent crude to $103.37 Feb. 3, the highest intraday level since Sept. 26, 2008. Brent for March settlement fell $1.93, or 1.9 percent, to $99.83 on the London-based ICE Futures Europe exchange on Feb. 4
For more info- http://www.businessweek.com/news/2011-02-07/hedge-fund-oil-bets-surge-on-middle-east-unrest-energy-markets.html
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