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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
OIL OPTIONS
The front Brent call put skew has switched in favour of the calls with the spreads reaching the highest since June this week.
- The options market is pricing in the upside price risk of supply disruptions due to the EU sanctions on Russian oil exports from early December. Concern for tanker availability due to the EU ban on insurance could add to the disruption. Two Indian refiners last month said they are pausing the purchase of spot cargoes from Russia for delivery after the ban due to a lack of clarity. The OPEC+ target production cut for November and December is also adding to the tightness despite ongoing concerns for global oil demand growth.
- The Brent second month 25-delta calls are currently trading around 1.5% above the puts. The second month WTI call-put skew is also now positive at nearly 0.9%.
- The Brent Dec23 skew has been closing since Oct 12 but is still showing a 6.3% premium to the puts.
Source: Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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