As speculators had been betting on oil prices going down, they were wrongfooted and had to abandon their positions brutally to avoid further losses, thus magnifying the price increase (an aside here: speculators were betting on oil going down not up).
Case in point:
Bloomberg.com: News
``It looks as if the market is beginning to recognize the extent to which demand has been weakened by high prices,'' said Tim Evans, an energy analyst for Citi Futures Perspective in New York. ``The bloom is off the bull.'' [...] Prices surged late yesterday, after the survey responses were collected [...] The oil survey has correctly predicted the direction of futures 49 percent of the time since its start in April 2004.
``It looks as if the market is beginning to recognize the extent to which demand has been weakened by high prices,'' said Tim Evans, an energy analyst for Citi Futures Perspective in New York. ``The bloom is off the bull.''
[...]
Prices surged late yesterday, after the survey responses were collected [...]
The oil survey has correctly predicted the direction of futures 49 percent of the time since its start in April 2004.
This is worse than hilarious. They are beginning to look worse than throwing a dice.
Just for measure, the only time the analysts predicted a rise in prices in the last 22 weeks, two weeks ago, the price declined... *Lunatic*, n. One whose delusions are out of fashion.
*Lunatic*, n. One whose delusions are out of fashion.
Potential for an oil-in-$ to oil-in-€ arbitrage?
They are beginning to look worse than throwing a dice.
Perhaps they are using special dice, ones with the same number on several sides. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
