After weeks of setting records near $100 per barrel, oil prices retreat. Analysts wonder whether this is the start of a bigger tumbleThe hot money that tested crude oil's highs is staging a rapid retreat. Oil futures have dipped 5.3% over the past two sessions, settling at $91.71 per barrel on Nov. 13, less than a week after hitting a trading high of $98.62 on the New York Mercantile Exchange. That record turned the never-seen milestone of $100 (BusinessWeek, 11/19/07) into a distinct possibility.
Now those same players are finding compelling reasons to bail out of West Texas crude. On Nov. 13, 30% of the options contracts to buy oil at $100 expired—and hedge funds and other speculators decided to collect their profits.
"They got exposure to the idea that as the market tests $100, everyone is going to sell oil, and the options would expire meaningless," says Adam Robinson, an analyst with Lehman Brothers (LEH). "They thought if the speculative rally is set to end, perhaps they should get out now. They didn't want to be stuck holding the bag."
Read More
