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Crude tumbles as hedge funds, others bail out

Date: Tuesday, August 7, 2007
Author: WSJ.com

From the WSJ: Crude-oil futures slumped nearly 5% to a one-month low, suffering their biggest loss in seven months as hedge funds and other big speculators with record bets on price gains bailed out after oil failed to push to new highs last week.

The front-month September light, sweet-crude contract on the New York Mercantile Exchange fell $3.42, or 4.5%, to $72.06 a barrel, the lowest settlement for a front-month contract since July 5 and the biggest percentage drop since Jan. 4. September Brent crude on the IntercontinentalExchange's ICE futures exchange fell $3.58 to $71.17 a barrel, the lowest settlement since June 29. Hedge funds and other speculators had boosted their net bets on a gain in Nymex futures, or net long position, to a record 127,491 contracts as of July 31, according to the latest U.S. government data. An extended net long position is seen by some as a signal that a big drop in prices is possible if funds bail out at the same time...