Posted on 01/10/2022 10:28:56 AM PST by Hojczyk
To say investors are bullish on oil again would be an understatement. In a year that has begun with serious uncertainty—largely about the path of interest rates and tech stocks — a positive call on oil is as close to a consensus opinion as it gets.
In fact, traders are making bets again that U.S. oil prices will rise above $100. It would take a major surge to get there. West Texas Intermediate (WTI) crude futures, the U.S. benchmark, were down 0.2% on Monday to $78.72 per barrel.
There are several reasons for the resurgent bullishness. For one thing, oil prices and stocks have proven resilient over the past year. Unlike in previous years, producers have stayed disciplined, choosing not to ramp up drilling to take advantage of higher prices.
“We have yet to encounter a market bear this year, whether on the commodity side, equity investor or with corporate clients,” wrote RBC Capital Markets analyst Michael Tran in a note on Sunday.
“Over the past week, open interest for June 2022 WTI $100 calls has increased by 10%,” he wrote. “Since September, open interest between $105-$150 per barrel strike prices have increased 14 times.”
(Excerpt) Read more at barrons.com ...
The decrepit old fool in the White House is doing all he can to make it go up. It won’t be $100 by the end of his term. More.
once it’s in the news, I start looking for a good time to sell ...
Let's go Brandon...
2024 is at the pump
“Over the past week, open interest for June 2022 WTI $100 calls has increased by 10%,” he wrote. “Since September, open interest between $105-$150 per barrel strike prices have increased 14 times.”
US bbl is 42 gallons; at $100/bbl, puts the crude cost per gallon around $2.50. Add in the refining costs (incl. losses of final volume), distribution costs (mostly fixed and/or amortized costs), labor costs (expect to see more pay-at-the-pump, thanks to the Let's Go Brandon results from DNC policies nuking our labor force), expect gasoline to exceed $4 a gallon pretty much everywhere, and expect it to stay above $4 until regime change. The psychological costs include idiots (including on FR) blaming this on gasoline retailers and "big oil".
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