Quote Originally Posted by SEC View Post
Another way to read this is that those who were shorting oil hard when it hit $100 got it wrong, very wrong and had to cover, pushing the oil price even higher.

So short covering may be contributing to the current oil price as well as speculators. Both point to a short term spike.

SEC
Anton Tagliaferro from Investors Mutual was saying on Inside Business this morning that the rapid movement in the oild price is not just a supply / demand issue (which counters Boon Pickin's recent commentary).

Extract from Inside Business:

ALAN KOHLER: The stockmarket is up about 15 per cent from it's lows in mid March. Are you just happy or are you worried or a bit of both?

ANTON TAGLIAFERRO: Look it's always a relief when the market goes up and I think that's what it's been, it's been a relief rally, you know.
Many of the issues that were around that caused the correction in the first place, you know, they haven't gone away.
Clearly the bail out of Bear Sterns gave some confidence in financial markets that further, you know financial institutions won't fall over.
But clearly, you know, the housing market in the US continues to fall away.
You know, the higher commodity prices aren't helping in terms of helping the consumer, helping economic growth going forward. So we think it's going to be pretty choppy, you know.
And again if you look at the corporate earnings outlook going forward, the resource sector aside, which by the way, I think a lot of the commodity prices are being buoyed by huge speculative buying, there's no doubt about it when you see the oil price moving four dollars in one night, that's not a supply demand adjustment, and then falling two the next.
You know, that's obviously some large speculative funds in there.