Loading ...A snippet from the great Alan Ableson of Barrons:
The Barclays bunch believes that given the amount of hysteria and misinformation being generated at the congressional bubble hearings, any legislative actions that ultimately result are apt to prove more disruptive than remedial. Such legislation seems destined to be rich in potential to create short-term turbulence and exaggerate longer-term price inflation by discouraging investment that might enhance supply and delay the necessary hard decisions that could moderate demand.Moreover, Barclays Capital feels that the role of institutional influence in commodity markets via investment in index funds has been vastly overrated. It reckons the rise in commodity funds under management in the first quarter at $13 billion, of which $11 billion represented the effect of higher prices and only $2 billion represented net inflows.
In fact, speculation in oil, the analysts report, has been “flat-lining within some broad swings for just over a year” and speculative money is moving toward the short side. On that score, the latest count of crude futures shows 216.4 million barrels in long positions, 188.1 million barrels in short positions.
Sad to relate, a glance at Barclays Capital’s price forecasts suggests triple-digit-crude as far as the eye can see. If it makes you feel better, they’re not talking $200 a barrel. But then, the Brits are notorious for their preference for understatement.
