As traders fretted over the risk of a major price spike, the call skew on second-month West Texas Intermediate futures jumped to the highest since March 2022. This demonstrates heightened market anxiety over Middle East tensions potentially impacting oil supplies and propelling prices upward, mirroring prior concerns following Russia's invasion of Ukraine.
Implied volatility has surpassed highs from October last year, which seems reasonable given that this escalation is potentially more impactful on oil supplies. This reflects the market's acknowledgment of the current geopolitical climate and its effects on future oil pricing.
Traders snapped up December calls on Brent crude to bet on oil reaching $100 or higher, with aggregate call volume hitting a record on Wednesday. This trend illustrates a robust belief among traders of a bullish future for oil prices, propelled by the ongoing geopolitical uncertainties.
Money managers' net long positions in Brent crude jumped by more than 20,000 contracts, highlighting a significant shift in sentiment amidst fears of supply disruptions in the Middle East. These positions suggest an expectation of further price increases due to conflict escalation.
Collection
[
|
...
]