Traders bet on return of $US100 US crude oil

by Gregory Meyer The prospect of a return to $US100-a-barrel crude is tempting some to bet against the bearish consensus in the oil market. One or more traders have resumed buying call options that pay out if benchmark US crude futures surpass $US100 by the end of 2018. Call options give holders the right to buy oil at a set price by a certain date. Open interest in these options has risen to the equivalent of 2.7 million barrels, nearly trebling from the start of the month. The bullish positions run counter to the downbeat sentiment that pervades the oil market. West Texas Intermediate crude for December 2018 delivery was $US64.25 a barrel yesterday. This futures contract last traded above $US100 a barrel in mid-2011, and spot US crude oil was at that level last July. Money managers last week had the biggest gross “short”, or bearish, position on record in WTI, data from the Commodity Futures Trading Commission reveal. Analysts’ median forecast for 2018 is $US75 a barrel, according to a Bloomberg survey. The call options are relatively cheap at $US2.36 a barrel and have more than three years to pay out in a volatile market. The last time … continue reading

The post Traders bet on return of $US100 US crude oil appeared first on CTRM Center.

Source: CTRM Center

Related Posts

Leave a reply