bowman711

Oil: A Slippery Slope Ahead?

One other thought: the author gives Oilsands Quest (BQI) as a (bad) example in his article. Has BQI dropped so much in price due to economics or drop in oil demand, or because it is a favorite of the well-researched hedge and mutual funds that were forced to liquidate anything they could to meet their cash requirements?

Oil: A Slippery Slope Ahead?

The monthly oil chart at futures.tradingcharts.... shows the huge drop in the price of oil. A drop due to loss of demand for oil - or due to the forced liquidation of all holdings by hedge and mutual funds? I side with a drop due to forced selling to cover leveraged positions or meet fund redemption demands.

At some point, this financial crisis will pass. What do you think will happen to the price of oil stocks when these funds start investing in them again? I'll bet 10,000 shares of BQI that when they do, oil will find its level approximately at the level it was in the middle of 2006 (see chart) and continue up at about the same rate it did until mid 2006.