Crude falls to $104 after Saudi's Al-Naimi says oil market is 'well-balanced'

Joseph Lazzaro — Tue, 09 Sep 2008 12:20:00 EST

Filed under: International Markets, Commodities, Oil

The head of Saudi Arabia's oil operation said Tuesday global oil supplies are "well-balanced," and the oil market breathed a sigh of relief.

Ali Al-Naimi, Saudi Arabia's oil minister, in Vienna for OPEC's September meeting, added that he sees healthy inventories, Bloomberg News reported Tuesday.

The above comments were enough to convince energy traders and economists that OPEC will maintain current production levels when it meets later today, and oil fell $1.99 to $104.35 per barrel in early Tuesday trading.

OPEC a bigger concern than Hurricane Ike

Economist Peter Dawson told BloggingStocks Tuesday analysts and traders are certainly watching Hurricane Ike, a Category 1 hurricane that's likely to strengthen and hit Texas' oil-rig-laden coastline, but the larger concern remains OPEC.

"Of course, all eyes are on Hurricane Ike, which could cause loss of life and also significantly damage to property and oil facilities, but oil industry preparation has advanced and we're much better able to cope with these storms than even 10 years ago," Dawson said. "In comparison, an OPEC production cut is something no one can prepare for."

Continue reading Crude falls to $104 after Saudi's Al-Naimi says oil market is 'well-balanced'

Crude falls to $104 after Saudi's Al-Naimi says oil market is 'well-balanced' originally appeared on BloggingStocks on Tue, 09 Sep 2008 12:20:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

Are hedge funds distorting the price of oil?

Joseph Lazzaro — Thu, 29 Nov 2007 18:34:00 EST

Filed under: International Markets, Other Issues, Exxon Mobil (XOM), Russia, Middle East, Venezuela, Chevron Corp (CVX), ConocoPhillips (COP), BP p.l.c. ADS (BP), Mexico, Canada, Commodities, Oil

Hedge funds, which control more than $2 trillion in assets, and when one includes leverage, substantially more than that, are an institution that has helped produce massive increases in trading volumes and financial transactions in the last decade.

Further, together with wealth management investment funds, private equity funds, and of course investment banks and brokers, these institutions form the bulk of the market's "shorter-term players" - - organizations that are likely to have an investment horizon that is shorter than the typical person's. They're also more-likely to use aggressive investment techniques and invest in high-risk instruments.

Few deny that the above institutions, particularly hedge funds, with their buying power and volumes, have increased market liquidity.

However, lately a growing chorus is beginning to question the ultimate impact of hedge funds, and comparable players. Namely, they're asking if hedge funds and their companions are distorting prices of commodities, stocks, and other investments.

Continue reading Are hedge funds distorting the price of oil?

Are hedge funds distorting the price of oil? originally appeared on BloggingStocks on Thu, 29 Nov 2007 18:34:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments