Oil Traders Are Betting Prices May Pass $200 a Barrel This Month

  • Bloomberg
  • Commodities News
Oil Traders Are Betting Prices May Pass $200 a Barrel This Month
Credit: © Reuters.

(Bloomberg) -- Traders piled into options that oil could surge even further after rising to the highest since 2008, with some even placing low-cost bets that futures will rise above $200 before the end of March.

Prices to buy call options for higher crude prices surged Monday as the market assessed the possibility of a supply cut-off from Russia, one of the world’s biggest exporters. At least 200 contracts for the option to buy May Brent futures at $200 a barrel traded on Monday, according to ICE (NYSE: ICE ) Futures Europe data. The options expire March 28, three days before the contract settles. The price to buy them jumped 152% to $2.39 a barrel.

A $150-a-barrel call option for the June Brent contract doubled from Friday, according to ICE, while the cost of $180 call options jumped 110%. The front-month May contract for Brent surged dramatically early on Monday as traders panicked over talks of a Russian crude ban amid Libyan supply disruptions and delays to expected progress in Iranian nuclear talks. 

JPMorgan Chase & Co (NYSE: JPM ) said last week that Brent crude could end the year at $185 a barrel should Russian supplies continue to be disrupted, while Australia & New Zealand Banking Group (OTC: ANZBY ) Ltd. saw around 5 million barrels a day of pipeline and seaborne oil supplies being impacted by new sanctions. 

READ: What a Ban on Russian Oil May Mean for an Already Chaotic Market

Russia is the world’s third-largest oil producer behind the U.S. and Saudi Arabia. The OPEC+ member exported 7.8 million barrels a day of crude, condensate and oil products in December last year, according to the International Energy Agency, supplying key fuels such as diesel, fuel oil, vacuum gasoil and a petrochemical feedstock known as naphtha to buyers across Europe, the U.S. and Asia. 

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  • ABHIJEET SINHA @ABHIJEET SINHA
    ONLY US TAKES BENIFIT ALL OF THESE DUE TO STROGEST POSITION MARK BY USD
    Like 2
  • Positive Critic @Positive Critic
    Then the West will lift sanctions on Russia. Who cares about Ukraine?
    Like 1
    • Arjun Devgania @Arjun Devgania
      what will be crude prices instead of Ukraine and Russia war ?
      Like 1
    • Durga Rao @Durga Rao
      @Arjun Devgania $70 _ $ 68 Over a period of time
      Like 0
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