Crude Oil Markets Getting Hammered. WTI Target $29 bbl

Crude Oil Markets Getting Hammered. WTI Target $29 bbl

Crude Oil Markets Getting Hammered. WTI Target $29 bbl

$USO, $OIL

There is a Big Bet that prices are about to sink to their lowest marks in more than a year.

About $7-M worth of options changed hands Friday that will pay off if WTI Crude Oil (NYSEArca:USO) falls beneath $39 bbl by mid-July, according to our data.

WTI Crude Oil hovered around $46 Friday, hasn’t traded below $39 since April 2016, it has been falling in recent weeks.

Friday, more than 14,000 August $39 puts changed hands, almost 20X the number of contracts previously outstanding for the Bearish option.

The trade was a sign of the strong negativity that’s washing over the global Crude Oil market.

Prices have plunged about 13% in the last 3 weeks, on fears that OPEC-led production cuts are not doing enough to stem a global supply glut.

For Friday’s bet to work, prices would have to match that drop in the next few weeks, during a time when Summer driving typically pushes demand higher, but the US and the world is awash in Crude Oil.

My work say to look for $29 bbl WTI price over the longer term.

HeffX-LTN Analysis for USO: Overall Short Intermediate Long
Neutral (-0.17) Neutral (-0.19) Bearish (-0.29) Neutral (-0.03)
HeffX-LTN Analysis for OIL: Overall Short Intermediate Long
Neutral (-0.17) Neutral (-0.19) Bearish (-0.29) Neutral (-0.03)

Have a terrific weekend.

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