As Oil Plumbs New Depths, Someone Sees $80 a Barrel by December
As Brent crude oil closed on Wednesday at its lowest level since before OPEC and other nations agreed to cut output, someone bet half a million dollars on prices surging to $80 by year-end.
Options to buy 10 million barrels of Brent crude for $80 a barrel in December traded Wednesday, far exceeding the next-largest contracts, according to exchange data compiled by Bloomberg. Placed in two trades, the transactions were especially large given they were to purchase crude at 66 percent above the day’s closing price.
Oil prices plunged 4 percent in London and 5 percent in New York on Wednesday as a surprise expansion in U.S. crude stockpiles undermined those analysts arguing a market rebalancing is now under way. Nonetheless, there were also reasons to be bullish, including escalating tensions between Saudi Arabia and Qatar, terror incidents in Iran, and the halting of Libya’s biggest oil field…..
Written by Alex Longley for Bloomberg.com