Last Week's Move in Oil Prices

Reuters published a special report on last Thursday's move in the oil markets.  It appears that negative news caused oil prices to dip slightly.  The factors were:

• People taking profits from the previous five months' run-up in prices
• Goldman Sachs and Roubini Global Economics putting out negative opinions
• Rumors that George Soros was unwinding his commodity positions
• The spectre of Quantitative Easing 2 by the Federal Reserve ending on June 30th
• Tighter monetary policy by China

When prices hit a certain point, black box computer algorithms placed orders to sell oil which formed a negative feedback loop.  As prices fell because of selling, they triggered more sell orders that lowered the prices even more.  Then additional sell orders were placed...

Several famous fund managers had big losses last week.  Andrew Hall's Astenback fund lost 12%.  Clive Capital lost 8.9%.  Man Group's AHL Strategy lost 5.3%.