Bets on Oil Hitting $250 in June as War Fears Mount- Bloomberg
Oil traders flocked to options contracts for more than 3 million barrels in a bet that prices could jump to $250 by June as geopolitical risks continue to rise, according to Bloomberg.
About 3,000 lots of June U.S. oil call options contracts worth $250 were traded for a penny each on Tuesday, according to data compiled by Bloomberg. Traders and experts said it was likely a “lottery ticket” that could pay off if prices rise to never-before-seen levels by the middle of next month.
Although the trade appears to be coupled with $25 put options, this could also indicate a broader macroeconomic strategy.
Bullish oil options volumes have skyrocketed to a record high, sending the call premium over puts this week to their highest levels since October, as Israel vows to respond in the wake of Iran’s missile and drone attacks over the weekend.
Prices for US crude futures rose to exceed $85 per barrel, and Brent crude is trading near $90, with increasing fears of a widening scope of the conflict against the backdrop of tight supplies and strong demand.
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