Dramatic price increases are fuelling speculation about big
In his 20 years as an analyst and trader in the
energy sector, Peter Linder can't remember a market period like
the one he saw in the first few weeks of May. Even with crude
prices jumping 40% in a year and hitting an all-time high of
$41 per barrel in mid-May, a large number of oil and gas
producers have seen their stock prices slump sharply.
"Quite frankly, I was flabbergasted," says Linder, who heads
the Canada-based DeltaOne hedge fund, which focuses on the
energy sector. "With the higher price of oil, one would expect
stocks to rally. But that wasn't happening. The opposite
Making the precipitous price slump more bewildering was the
fact that a substantial number of oil and gas producers had
essentially vanished from exchanges in a spurt of merger
activity. Linder notes that in the...