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OIL OPTIONS: Crude Options Hold Small Bearish Put Skew

OIL OPTIONS
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The near term crude options are maintaining a small skew to the puts as sentiment remains bearish due to ongoing soft China demand and risk of a market surplus in 2025.

  • The Brent second month call-put implied volatility spread is trading around -0.7% today while the WTI second month skew is around -1.7%. Both were trading with a skew to the calls late last week due to the risk of potential supply disruption from increased sanctions on Russian and Iran.
  • Brent second month implied volatility is near the lowest since July with prices still bouncing within the $70.7/bbl to $76.5/bbl range since mid October. Brent second month implied volatility is today at 24.6% and WTI at 28.5%.
  • Crude futures and options aggregate traded volumes are holding just below normal levels this week with Brent futures averaging 0.90m and options of 190k.  Average put option volumes have traded in slightly greater volume than calls this week amid the bearish market sentiment.  
    • Brent FEB 25 down 0.2% at 72.74$/bbl
    • WTI FEB 25 down 0.2% at 69.25$/bbl

 

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The near term crude options are maintaining a small skew to the puts as sentiment remains bearish due to ongoing soft China demand and risk of a market surplus in 2025.

  • The Brent second month call-put implied volatility spread is trading around -0.7% today while the WTI second month skew is around -1.7%. Both were trading with a skew to the calls late last week due to the risk of potential supply disruption from increased sanctions on Russian and Iran.
  • Brent second month implied volatility is near the lowest since July with prices still bouncing within the $70.7/bbl to $76.5/bbl range since mid October. Brent second month implied volatility is today at 24.6% and WTI at 28.5%.
  • Crude futures and options aggregate traded volumes are holding just below normal levels this week with Brent futures averaging 0.90m and options of 190k.  Average put option volumes have traded in slightly greater volume than calls this week amid the bearish market sentiment.  
    • Brent FEB 25 down 0.2% at 72.74$/bbl
    • WTI FEB 25 down 0.2% at 69.25$/bbl

 

Keep reading...Show less