Live World Indices are powered by Investing.com
Friday, 15 April 2016
Traders Look for Lower Oil Prices
Oil traders have ramped up their bets in the futures and options market that April's rally will run out of steam, as the outlook for demand weakens and with few clear signs of an end in sight to a supply glut.
While prices for front-month delivery Brent crude rallied by as much as 20 percent this month, sparking hopes of an end to a rout that had previously pulled the market down by as much as 70 percent since 2014, data for contracts for later delivery looks much weaker.
The spread between Brent for delivery in December 2017 and those for delivery next month has halved since March 1 to just $4.40 per barrel, and in some cases even wiping out the contango, a price curve where contracts are more expensive going forward than for prompt delivery
U.S. bank Morgan Stanley said in a note to clients that it was "bearish oil prices" into the second half of the year and that "given producer hedging appetite into 2017 and the storage situation (full tanks), which requires at least some contango."
With no end in sight to a production glut and also increasing worries on the demand side, with the Organization of the Petroleum Exporting Countries (OPEC) cutting its consumption forecast this week, traders are positioning themselves for further price falls.
In the options arena, the number of put options tied to the July $30 strike price has increased by 150 percent, or 4,700 contracts, since mid-March, indicating a swell in bearish sentiment tied to that time frame.
Put options give a trader the opportunity to sell a product at a certain price, so a July put at $30 per barrel would make money if prices, currently around $43.50 per barrel, hit that level by summer.
- #England Mourns Passing of Golden Eagle
- EYE on the World - 30 April 2016
- Today's ENERGY News - 29 April 2016
- The Nuclear Taboo - Rethinking Armageddon
- Today's ENERGY News - 28 April 2016
- Climate Change Dramatically Affects Africa
- Today's ENERGY News - 27 April 2016
- Believe it or Not; #India Cooks at Unbelievable 45...
- Today's ENERGY News - 26 April 2016
- Just Awful: "Beautiful Cambodian Tigers Functional...
- Peak Oil Today - 25 April 2016
- Today's ENERGY News - 25 April 2016
- Goldman Sachs Pegs $20-40 as New #Oil Order Range
- EYE on the World - 23 April 2016
- More Woes for Schlumberger
- Education of Women Key To Advancing Human Conditio...
- Today's ENERGY News - 22 April 2016
- Today's ENERGY News - 21 April 2016
- Harvard Study: Now Methane Causes Worse Impact on ...
- Today's ENERGY News - 20 April 2016
- Invisible Hand Defeated OPEC Cartel?
- Today's ENERGY News - 19 April 2016
- Peak Oil Today - 18 April 2016
- Today's ENERGY News - 18 April 2016
- Oil Slides as Hope Fades for Doha Agreement
- At Last OPEC No Longer Drives the Bus
- EYE on the World - 15 April 2016
- Today's ENERGY News - April 15, 2015
- Traders Look for Lower Oil Prices
- Today's ENERGY News - April 14, 2016
- Today's ENERGY News - April 13, 2016
- BULLS Lead BIG Charge in #Crude
- Today's ENERGY News - April 12, 2016
- Peak Oil Today - April 11, 2016
- Today's ENERGY News - April 11, 2016
- #OMG Oil Tankers Cause Traffic Jam Near Iraq
- EIA Data Bullish Oil Prices Rise
- EYE on the World - Streetcars With Many Names
- Today's ENERGY News - April 8, 2016
- ALERT: Natural Gas Prices Positioned for Huge Jump...
- Today's ENERGY News - April 7, 2016
- Real Estate #Calgary Prices in Tailspin
- Today's ENERGY News - April 6, 2016
- Coal Prices Slump with Asian Demand
- Today's ENERGY News - April 5, 2016
- Electric Cars Leading the Conversion
- Peak Oil Today - April 4, 2016
- Today's ENERGY News - April 4, 2016
- Today's ENERGY News - April 1, 2016
- EYE on the World - Our Hometowns
- ▼ April (50)
- ► 2015 (19)