Bluegold hedge fund denies causing WTI volatility | FT Alphaville

Bluegold hedge fund denies causing WTI volatility

There are some very intriguing flashes coming out on Reuters regarding the BlueGold hedge fund on Friday:

RTRS-HEDGE FUND BLUE GOLD DENIES IT WAS RESPONSIBLE FOR VOLATILITY IN CRUDE OIL PRICES IN LAST FEW DAYS

RTRS-HEDGE FUND BLUE GOLD SAYS OIL OUTLOOK BULLISH FOR 2010, DIFFICULT TRADING ENVIRONMENT

RTRS-HEDGE FUND BLUEGOLD SAYS BUSINESS AS USUAL, DENIES RUMOURS ABOUT ITS CONTINUING OPERATIONS

Readers might remember BlueGold for poaching one of Morgan Stanley’s most respected FX analysts, Stephen Jen, back in May last year.

Jen happened to go bullish on the euro back in March 2009 while still at Morgan Stanley, but was quoted on Thursday saying he believed the dollar would now outperform the Eurozone currency.

Right as always, there then.

In any case, some more details coming through from Reuters suggest traders attributed WTI’s 5 per cent sell-off on Thursday to hefty liquidations by the commodity hedge fund.

Here, meanwhile, is a chart of recent WTI activity courtesy of Olivier Jakob at Petromatrix:

So is this an example of some delta hedging gone wrong for BlueGold?

We’ll keep you posted on anything we hear.