Hedge Funds Are Pouring Back Into Oil Futures (USO, JJC)
Tim Seymour: Institutional investors are increasing their bets on rising oil prices. Watch for this to play out elsewhere in the commodity markets as well.
According to the latest Commodity Futures Trading Commission numbers, net speculative interest across commodity markets jumped 5% last week to reflect more institutional traders taking long positions in the asset class.
Options and futures interest on West Texas Intermediate crude — the benchmark for North American petroleum prices — surged 44%.
As speculation rises, it shows hedge funds are getting longer and longer again after the recent decline in the commodity markets.
You can get access to West Texas Intermediate via funds such as the United States Oil ETF (NYSE:USO):
What do hedge funds love besides oil? Historically, the answer has been Dr. Copper, which trades via the iPath DJ-UBS Copper TR Sub-Idx ETN (NYSE:JJC) and other funds:
Copper seems to have found a floor at $4.40 a pound — barely 6 cents less than where we are now.
Emerging Money provides insightful and timely information about the increasingly important world of Emerging Market investments. CNBC Emerging Markets Contributor Tim Seymour leads the team of Emerging Money to bring you cutting edge global news and analysis.
About Tim Seymour: Tim is a founder of Emerging Money. He is a founder and Managing Partner at Seygem Asset Management, and The Emerging Markets Contributor to CNBC. Seygem Asset Management focuses on investing throughout the global emerging markets asset class. With a view that emerging and developing economies will continue to outpace the economic growth and advancement of developed economies, Seymour has devoted a career to investing in the dominant markets of tomorrow, today. Seymour’s career has included significant experience in both alternative asset management (hedge funds) and capital markets, having launched two hedge funds, and built the largest Russian broker dealer in the USA. Seymour started his career at UBS, focusing on international credit (cash, swaps, forex) in a specialized hedge fund group (New York). Seymour completed the firm’s training program after graduating with an MBA in international finance from Fordham University. Seymour received his undergraduate degree at Georgetown University.