OIL OPTIONS
The downside Brent crude options put skew has turned the most bearish since December with market focus on oil demand concerns from higher for longer US interest rates offsetting the potential for extended OPEC+ production cuts beyond June.
- Front month futures are finding some support today but are still near the low end of the $3.5/bbl range seen for most of May so far.
- The Brent crude second month 25 delta call-put skew is down to -3.7% from around -2.5% earlier this month. WTI second month skew is the most bearish since March at -3.45%.
- The Brent crude Dec24 call-put skew has also edged slightly wider this week to -2.9% today while the WTI Dec24 skew is down to around -3.6%.
- Implied volatility has picked up slightly this week but remains at historically low levels with rangebound futures prices and no clear market direction. Brent second month atm implied volatility is at 22.85% and WTI to 25.0%.
- Aggregate crude traded volumes have averaged above normal so far this week with Brent futures around 1.22m and options at 157k. WTI futures volumes were closer to normal at 0.81m and options of 91k.
- Brent JUL 24 up 0.3% at 82.16$/bbl
- WTI JUL 24 up 0.3% at 77.78$/bbl
- Brent JUL 24 up 0.3% at 82.16$/bbl
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