Speaking of being wrong at a turn (like the JP Morgan wannabes on interest rates and gold), I thought you'd appreciate this one. Insane behavior don't you think?:
Speculators Amass Record Short Position in Crude Oil Futures
By Stephen Voss
New York, Dec. 21 (Bloomberg) -- Speculators sold more crude oil
futures contracts in New York than they bought in the week ended
Tuesday, expanding a net short position to its highest level
since the contracts began trading in 1983, a report showed.
Hedge funds and other speculators had sold 71,928 more contracts
than they had bought as of Tuesday, a weekly report from the
Commodity Futures Trading Commission showed. The 83,978 contracts
that speculators had sold on the New York Mercantile Exchange
also was a record.
The increased selling reflected that speculators doubted that the
Organization of Petroleum Exporting Countries will succeed in its
efforts to boost prices by cutting production, analysts said.
``This is right into the teeth of a fairly sure-thing production
cut by OPEC,'' said Tim Evans, senior energy analyst at IFR Pegasus
in New York. ``These speculators, judging by their positions,
are convinced that the cuts won't take place or that the cuts will
be ineffective in supporting prices.''
OPEC meets on Dec. 28 in Cairo to decide on whether to make cuts in
its daily production quota of 1.5 million barrels, or 6.5 percent.
The group has won agreement from non-OPEC countries to make most of
the cuts it had sought from them as a condition for its own
reduction.
Still, oil futures have fallen 0.6 percent since Nov. 14, when
OPEC first made the proposal, to $19.62 a barrel.
For every seller of a futures contract there's a buyer, so while
speculators are net short in crude oil contracts, so-called
``commercial'' traders, such as refiners and fuel marketers,
are net long.
More Closely Watched
Since speculators tend to buy and sell at a faster pace than
companies that use the market to hedge their future inventory
flow, it's the speculator positions that traders watch for
sentiment about the direction of prices.
The following table shows the changes in ``non-commercial,''
or speculator, positions for Nymex crude oil, gasoline, heating
oil and natural gas futures. A negative figure in the final column
means shorts exceed longs.
Contract Date Longs Shorts Longs Minus Shorts
Crude oil Dec. 18 12,050 83,978 -71,928
Crude oil Dec. 11 13,032 82,311 -69,279
Gasoline Dec. 18 5,748 11,384 -5,636
Gasoline Dec. 11 5,556 13,491 -7,935
Heating oil Dec. 18 2,339 15,145 -12,806
Heating oil Dec. 11 330 18,943 -18,613
Natural gas Dec. 18 6,667 38,474 -31,807
Natural gas Dec. 11 6,790 39,692 -32,902 |
