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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 crude options call-put skews have switched back to a strong premium to the puts reflecting the bearish sentiment in the futures markets. The downside put skews for WTI are greater than for Brent amid increased concerns for the US economy.
- The near term traded at a small volatility premium to the call options last week amid rising Middle East risks and declining US stocks but has switched with the market focus returning to global demand concerns after previous disappointing Q2 GDP and weaker-than-expected US jobs data last week.
- Any potential of direct involvement from Iran in the Middle East conflict could risk supply from the region but the risk premium is currently limited with no impact so far on actual oil supplies.
- The second month Brent 25 delta call-put spread has fallen back towards levels seen in July to -2.5% today while the WTI spread is the widest since early June at -4.6%.
- The Brent Dec24 call-put skew has fallen to -3.3% from -0.5% last week while the WTI spread is the most bearish since March at -4.8%.
- WTI second month implied volatility has risen to the highest since November at 37.6% while Brent volatility is up to 32.5%.
- Brent OCT 24 down 0.4% at 76.49$/bbl
- WTI SEP 24 down 0.6% at 73.11$/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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