06.03.2013 - Broken Brent, hedge fund noise and static fundamentals
Observing Brent in the first two months of 2013 has been a bit like watching a broken barometer. It is not clear what the market has been reacting to, as prices swing to and fro, but it certainly hasn't been fundamentals. Volatility has fallen to its lowest level for almost two decades. But what remains seems to have been induced by hedge funds rather than changes in physical supply and demand. The now customary rally at the beginning of 2013 started a little later than last year. But between Jan 17 and Feb 8, front-month futures climbed steadily from $110 to more than $119 per barrel, before subsiding with the same steady consistency and ending up back where they started by the start of March..............................................Full Article: Source
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