This post originally appeared in Money Stuff.
Oil is a perfectly normal thing for an institutional investor to invest in. “I think oil prices will go up so I’m gonna buy some oil”: very common thought process. But if you are a hedge fund, or a pension fund, or an endowment, and you think oil prices will go up, and you want to buy oil, you have a bit of a problem, which is: Where will you put it? Oil is … slippery? “It is also highly toxic, very difficult to store, and it smells bad,” my Bloomberg colleague Tracy Alloway once wrote. “Don’t try to buy a barrel of oil,” a broker told her; “It’ll kill you.”