Cameron Hanover – Daily Energy Hedger – April 27, 2010

Oil prices dropped on Monday as traders reacted to an embarrassment of riches. Because the economic news has been so good recently  so good that it has eclipsed the market’s recent, poor fundamentals – investors decided to take profits on Monday, out of fear that the Federal Reserve might indicate it is nearer to raising interest rates, soon. Most economists tend to feel that any interest rate hike would be awfully premature, but investors were discounting the probability/possibility on Monday and their conclusion was that the odds had increased on the Fed ramping up its hawkish language, even if no one really expects rates to be increased here and now.