• 3 minutes Don't sneeze. Coronavirus is a threat to oil markets and global economies
  • 5 minutes Boris Johnson taken decision about 5G Huawei ban by delay (fait accompli method)
  • 9 minutes This Battery Uses Up CO2 to Create Energy
  • 12 minutes Shale Oil Fiasco
  • 2 hours Historian Slams Greta. I Don't See Her in Beijing or Delhi.
  • 18 hours We're freezing! Isn't it great? The carbon tax must be working!
  • 2 days Indonesia Stands Up to China. Will Japan Help?
  • 1 day US (provocations and tech containment) and Chinese ( restraint and long game) strategies in hegemony conflict
  • 10 mins Let’s take a Historical walk around the Rig
  • 17 hours Beijing Must Face Reality That Taiwan is Independent
  • 1 hour Tesla Will ‘Disappear’ Or ‘Lose 80%’ Of Its Value
  • 2 hours Trump has changed into a World Leader
  • 1 day Might be Time for NG Producers to Find New Career
  • 2 days Environmentalists demand oil and gas companies *IN THE USA AND CANADA* reduce emissions to address climate change
  • 2 days Anti-Macron Protesters Cut Power Lines, Oil Refineries Already Joined Transport Workers as France Anti-Macron Strikes Hit France Hard
  • 3 days Angela Merkel take notice. Russia cut off Belarus oil supply because they would not do as Russia demanded

Back To $100 Oil? Traders Aren’t So Sure

Rig

It was a lazy summer for oil markets. From May through early August Brent crude oil prices fell from $80 to $70 as economic growth concerns overruled fears that the market was inadequately supplied. Oil’s rally had cooled- as had talk of $100 oil- and most analysts forecasted moderating prices as the US summer driving season came to a close.

The sideways trend was interrupted in mid-August after the Trump administration took aim at Iran with harsh sanctions which reignited fears that there simply isn’t enough oil being produced globally. This week those fears manifested in yet another leg higher in prices as Brent crude oil futures topped $86 for the first time since 2014. Brent is now higher by about $16 (28 percent) on the year and talk of $100 oil as a risk to consumers and a boon to suppliers is back on.

However, market sentiment indicators are not all screaming Full Speed Ahead on oil’s next leg higher. In terms of positioning, hedge funds are currently carrying a net-long in NYMEX WTI of 4% above the 2-year average and hold a net-long in ICE Brent that’s 12% above the 2-year average. In spread markets the difference between prompt and later-dated contracts is still below YTD highs and in options markets puts and calls are trading at roughly the same volatility premiums (meaning the recent interest in $100 calls is being matched by equivalent put options.) In combination, these market signals suggest to us that large oil traders, while…




Oilprice - The No. 1 Source for Oil & Energy News