Does it seem as if the price of oil has been unusually volatile lately? Today, it rose nearly 2% a barrel, while earlier in the month it dropped to 19-month lows. Throughout history, speculators have moved the commodities market, but is there more going on now than meets the eye? On today’s “Power Lunch” CNBC’s Sue Herera found out that the current volatility in oil might actually be a consequence of hedge funds and indirectly--the demise of Enron.
Some investors believe that hedge funds are responsible for the sometimes erratic swings in the price of oil. Peter Fusaro, Chairman at Global Change Associates as well as Co-Founder of Energy Hedge Fund Center was one of the first to notice. “We are now tracking over 530 energy hedge funds and 130 commodity hedge funds,” he said. “They are exacerbating price volatility on an intra-day basis.”