Houston Chronicle – Billionaire investor George Soros told a Senate panel Tuesday that the run-up in oil prices has "some of the earmarks" of a bubble and that institutional investors stampeding into commodities are helping raise prices.

Appearing before the Senate Commerce, Science and Technology Committee, the famous hedge fund manager and supporter of liberal causes described the pension funds, university endowments and other large institutional investors pouring billions of dollars into commodity index funds as reminiscent of a craze to add insurance to portfolios that he said led to the stock market crash of 1987.

"In both cases," Soros said, "the institutions are piling in on one side of the market, and they have sufficient weight to unbalance it.

"If the trend were reversed and the institutions as a group headed for the exit as they did in 1987, there would be a crash."

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Bloomberg- Hedge-fund managers and speculators reduced bets on higher oil prices by 80 percent since July as crude futures rose to records and U.S. regulators started investigating trading, government data show.

So-called speculative net long positions fell to 25,867 contracts on the New York Mercantile Exchange in the week ended May 27 from a record 127,491 on July 31, according to a U.S. Commodity Futures Trading Commission report on May 30.

The decline may complicate the CFTC’s probe as regulators try to determine how much of the rise in oil to more than $135 a barrel last month was caused by speculators who may have manipulated the market instead of consumer demand.

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CNNMoney.com- Oil and natural gas prices have soared to new highs this year, but most energy hedge funds are having trouble turning a profit in their trades.

Energy hedge fund managers interviewed by Hedge Fund Trades cited various reasons for their weak performance this year. Some have been on the wrong side of oil prices swings, while others have suffered from positions in oil companies and refiners that produced lackluster returns.

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