Hedge-Fund Investors Pour Into Oil

Investors predict oil will soon exceed $80 as commodity funds pile in

- Suzy Waite

Hedge funds investing in oil are luring capital at the fastest pace in more than a year.

With crude climbing to levels not seen since 2014, commodity funds have recovered the client outflows they suffered last year. And if firms such as Westbeck Capital Management and Commodities World Capital are correct about prices soon exceeding $80 a barrel from about $68 currently, then the jump in allocations may just the beginning.

Until April 20 everything seemed to point to oil extending its gains, with confidence in the global economy building and geopolitical tensions and production shortages showing no signs of going away. Then U.S. President Donald Trump slammed OPEC on Twitter, saying prices are artificially high and will not be accepted. Prices slipped 19 cent a barrel.

Still, these funds are “desirable in times of expected market volatility” and will probably continue to see inflows in 2018, said Peter Laurelli, global head of research at data provider eVestment.