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Crude Oil New Systematic Risk |
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Written by Wilfred Ling
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Saturday, 28 June 2008 |
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Previously I mentioned that Crude Oil (and Agriculture) has a new systematic risk. Their prices are not just dependent on demand and supply but also political pressure to reduce the price. In a reuters report, HERE it was quoted "The U.S. House of Representatives on Thursday approved legislation that directs the Commodity Futures Trading Commission to use all its authority to curb speculation in energy futures markets. " This new political risk must be taken into account when people buys into Crude Oil futures. One of the commodity futures fund investing a large portion in Crude Oil is now a top-volume fund according to a unit trust online portal. I think many people do not realise the level of risk they are in for.
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