Traders place bets on $250 oil – OilPrice.com Achi-News

Oil traders were making big bets amid geopolitical uncertainty, Bloomberg data shows, as speculators pulled 3 million barrels worth of options contracts.

Although the move was largely seen as a Hail Mary, about 3,000 June $250 call options in US crude were trading for just 1 cent each on Tuesday – trades that Bloomberg likened to a token lottery because of the unlikely event that it would actually pay. out But certainly one that would pay out handsomely, if it paid out at all.

The trades, according to Bloomberg, were apparently paired with $25 put options.

Bull oil options have risen to record highs, with premiums for forward calls reaching their highest levels since October as geopolitical tensions between Israel and Iran continue to run hot.

Benchmark Brent crude oil is currently trading near $90 a barrel, with WTI trading above $85. The last time Brent traded near $90 a barrel was last October.

Oil prices are trading down on the day on Tuesday, however, after Federal Reserve Vice Chairman Phillip Jefferson said the US central bank was prepared to keep its monetary policy tight if inflation did not slow as much as predicted. The economic development was not enough to send oil prices down significantly but it was enough to offset what could have been a spike after the Biden Administration said it would hit Iran with additional sanctions for its attack on Israel, with geopolitical tensions continuing to add an element of supply fear to the oil markets.

The oil markets are now waiting for Israel’s response to the Iranian attack to determine how much of a risk premium for crude oil there will be.

By Julianne Geiger for Oilprice.com

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