SLAR250

5 Reasons Why the $700B Bailout Could Translate to $250 Oil

Spike in oil Sept 22nd was directly related to a short squeeze on the OCT futures contract.Oil futures contract the last half hour of trading was directly related to a demand and supply issue. Refiners and end users hedged their oil exposure created by recent hurricanes Ike and Gustav positioning themselves to take physical delivery of the “ black gold”. Traders who supplied this liquidity will normally close short futures positions to alleviate the physical delivery and remove these shorts from their sheets. As this unwinding occurred, offers were non-existent as the original buyers held their longs creating a massive short squeeze.