Updated: March 1, 2017
There are, literally, a billion reasons to avoid the energy sector right now.
Hedge funds now own a billion barrels worth of bets that crude oil prices are heading higher. Problem is, these guys are usually wrong – especially when they wager with such conviction!
In April 2014, I warned that then-$103 crude oil was due for a drop. U.S. crude oil inventories were at 5-year highs, yet money managers were “net long” 336,000 contracts on crude oil future. They were doubling down on the goo at the worst possible time.
When oil prices began to roll over, hedgies were forced to liquidate their bad bets in unison.… Read more