Are financial quirks behind the recent rout in oil?

WTI crude oil is up $1.15 today in a rebound after four days of heavy selling. It was a particularly curious move in crude given that the dollar was falling and risk assets were broadly stronger.

Former Goldman Sachs chief commodity analyst Jeff Currie has weighed in with a theory that the selling was a result of the “oil carry trade”.

He describes it as a trade to borrow paper/physical barrels, convert into USD, and invest in US Treasuries.

It “squares a record weak financial oil market against a tight fundamental oil market, as the market is liquidating both physical and financial barrels for US dollars,” he writes.

That sounds like a stretch today but the recent oil move is certainly a puzzle.

h/t @ericnuttall

This article was written by Adam Button at www.forexlive.com.