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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 skew to cover downside in the Brent and WTI options market has reduced in reaction to supply concerns and the potential Russian output cut in March.
- On Friday Russia’s Novak said that Russia plans to cut March output by 500kbpd following a week of other short term supply disruptions. OPEC has no plans to adjust output in reaction to the change by Russia.
- The second month Brent call-put skew is drifting back down slightly today having closed in to around -1.5% on Friday. The skew was as wide as -3.76% early last week. The WTI second month skew has closed from around -4.25% to -1.87% today.
- The longer dated crude call-put spreads have been gradually closing with optimism for a demand recovery in the second half of this year and are now supported by renewed concerns for Russian output despite robust flows up until now. The Brent Dec23 skew has closed to around -4.26% and the WTI Dec23 skew is at -5.23%.
- The second month ATM implied volatility has increased with Brent up from a low of 36.7% on 9 Feb to 37.8% today.
- Brent APR 23 down -0.8% at 85.72$/bbl
- WTI MAR 23 down -0.8% at 79.08$/bbl
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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