Oil Price - Sept 28

[dan_s]

Part of the reason that oil is down a bit today is because the U.S. Dollar Index is up this week. Just the excuse that speculators needed to take gains on their LONG positions in oil.

Oil traders take a long or short position and when they get a gain they lock it in by setting stop loss orders very tight. Oil and Gold are the two most actively traded commodities in the world, so there is lots of trading volume. A little selloff can cause a cascade until buyers jump back in. The buyers are often the sellers from earlier in the day.

My guess is that speculators outnumber commercial traders for oil about 100 to 1.