The Associated Press- As oil prices charge past $110 a barrel, analysts say government-run investment funds from oil-rich nations may be adding speculative heat to an already red-hot market. <\/p>\n
By placing bets in futures markets, these sovereign-wealth funds are no different than hedge funds, pension funds and other institutional investors, with one exception: at the same time they profit by trading "paper" barrels, their governments’ oil companies also reap huge sums pumping black gold for consumers worldwide.<\/p>\n
While there is no public data proving that sovereign wealth funds invest in oil futures contracts, energy analysts say it’s likely they’re making financial wagers on oil — and other commodities — for the same reasons as other institutional investors: to take advantage of rising global demand and to cushion them from the falling dollar.<\/p>\n
"They have two places to put their money: stock markets and commodities markets," said James Cordier, president of optionsellers.com, a trading firm. "That’s an easy choice right now."<\/p>\n