Brent hit $59.77 per barrel on September 26, but was back to $55 per barrel a few days later. There are many reasons why oil prices are struggling to break above $60 even though OPEC continues to hold back about 1 million barrels of supply per day and tensions in the Middle East have risen sharply. For example, oil inventories are declining, but storage remains elevated. Also, fears that OPEC could flood the market next year have not entirely gone away. There is also a short-term explanation for the recent fallback in prices. Hedge funds and other money managers built up a massive pile of bullish bets in the oil futures market, hoping to ride the wave up. But, as has happened multiple times in the past, when investors get too far ahead of the fundamentals, the rally ends up coming to a dead end. The music stops, and […]