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Forget the glut, as oil prices enter irrational territory

Commodity funds using algorithms to detect profitable trends drive much of the sell-off

BIG ROUT: Overreaction in oil markets tends to be the norm rather than the exception, and the view that oil is now far oversold does not mean that a recovery is imminent.


WORLD oil markets quietly breached an important barrier as they crashed nearly 30 per cent to below US$30 a barrel in the opening weeks of 2016, crossing the fuzzy line separating a rational response to fundamentals from an irrational fear where the only way forward is down, down,...