End of an era of cheap oil


OPEC continues to make efforts to alleviate the situation. In July, the cartel increase oil production by 600 thousand barrels to 29.57 million barrels a day. In August, the oil industry, as expected, reached just over 30 million barrels per day and increased to 31.5 million barrels in September. "With the current trend of OPEC oil production will be more than adequate to meet demand in the remainder of 2004 and in 2005 city, "- said in doklade.Pravda, these figures include the production of oil in Iraq, so the threat of termination of Iraqi exports due to sabotage at oil industry in the country greatly affects the futures market.

In addition, support for the oil bulls have the last few months a number of speculative games of large hedge funds [1, 3], as well as long-term players in the market pessimism FOREX against the U.S. currency.

Hedge funds Hedge funds are attacking, the total assets which exceed $ 870 billion, now work mainly with private investors, having a large sostoyanie.The Bank of New York published a study on September 13 hedge fund industry. According to the report, over the next 5 years, institutional investors can significantly increase the volume of investments in hedge funds to increase the profitability of the assets managed. Earnings performance of many mutual funds, the United States is not satisfactory due to the fact that in recent years have had a negative impact of periodic stock market crash. It should be noted that the negative situation on the U.S. stock market in July - early August, while not significantly affected the assets of mutual funds.

According to TrimTabs, during this time, the inflow of funds into equity funds amounted to only a few billion dollars. International equity funds were supplemented by even more insignificant amount - several hundred million dollars. Inflows into mixed funds was comparable to their outflow. With respect to the bonds, the company TrimTabs mostly recorded outflows of money.

Against this background, a surprisingly positive results from large hedge funds are of interest to them by the world community of financiers.

The vice-president of The Bank of New York Brian Rouen (Brian Ruane), the growing interest of institutional investors in hedge funds can significantly change the methods and evaluation of the effectiveness of the latter. Experts forecast The Bank of New York, by 2008, investments of institutional investors in hedge funds increase by $ 240-300 billion, with the largest share of these investments will come from pension funds.

Losses incurred by a majority of pension funds in the years 2000-02, encouraged their managers to strengthen the diversification of investment portfolios. To date, a significant amount of hedge funds have already invested the largest U.S. pension fund Calpers and the largest Dutch pension fund ABP.

In this context, the question is: What are the financial instruments are used by these funds, if the results are significantly different from that of the "classic" mutual fund? It turns out that many hedge funds have mastered how profitable speculation in the energy futures markets. Achieve a return on the commodity markets as "elated" part of them, they begin to penetrate deeper into the oil business.