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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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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