Investors holding positions in the KTC Capital Management Oil Hedge product realized major returns as reports of rising American reserves stemmed a two month rally on oil, keeping barrel prices below US$86.
The benchmark crude oil price went from $69 early in the year to more than $87 on expectations that prices would follow the global economic recovery. Consumption continues to be weak, however, as anticipation for recovery now seems premature.
Heating oil and diesel demand has remained flat, and jet fuel usage is off by nearly 3.8% over last year. Automotive gasoline consumption did rise, however, but only by 1.6% over previous yearâ€˜s figures. Currently analysts are calling for the status quo, at least until there is stronger indication that global recession is less of a threat.
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