Why is Oil Not Trading Higher on Iraq Uncertainty?

Your next video will start in
  • Info

  • Comments


June 30 (Bloomberg) -- Bloomberg's Scarlet Fu, Greg Bender, and Scott Bauer, senior market strategist at Trading Advantage, put oil prices in focus. They speak in "On The Markets" on "In The Loop."

Resistant to developments?

2.5% in june, given the kind of movement we have seen in iraq and on the ground.

There is always a question of how strong the economy is in general.

The seasonality right now is not the best for oil.

July and august 10 to be negative.

This has been a breakout.

We did clear resistance which is important.

Which has gone sideways and not up to the target everyone is expecting.

Notably, we have seen the premium the market is paying for immediate delivery.

We will get to that in a moment.

With all of that in mind, reg out in ways greg has called it, how are you trading in oil?

It is very range bound.

We broke through resistance at 104 and did not get to the 110 level.

We are just above 105 right now.

If we see one of five get hit or any debt, i would hop on the short side here.

We are very range bound.

I would hop on the short side and look for support at the 1.2 level.

With all the strikes we have seen in iraq, the shock value is out of the marketplace.

Greg alluded to looking at that in the option volatility and oil.

We see that way down.

The shock value is gone.

A lot of pressure is off.

If anything in this trade, we will see some downside pressure in the next couple days.

Let's put trade in layman's terms.

Potential profit of about 275 per valid -- per barrel.

Since the contractor and trolls 1000 barrels, the total would be 2007 hundred $50. greg, when you look at what is going on in oil, you see the u.s. post-tentative steps toward exporting crude.

Is that a bigger factor?

It does not look like it.

Even specifically, if you look at wti's discount to brent in the world oil market, that is right around a two week average of eight dollars per barrel.

There does not seem to be an immediate rise impact in the short term.

I want you to explain what backwardation means.

Future contracts have expiration marks and it is a condition that exists where future contracts for more immediate delivery trade a premium.

That condition generally exists in times of high demand and or limited supply.

Do you expect that to continue?

I absolutely do.

I could not agree more.

In the options world, i am looking to buy august puts in u.s. oil.

That plays right into what greg is saying.

Thank you so much.

Scott and greg, for giving us our options insight.

We are on the markets once again in 30 minutes.

Thank you so much.

Spending froze in the first quarter.

We know that.

That meant corporate profits also melted.

The biggest decline on the bottom line since the beginning of the great recession.

Mike mckee has the real deal on whether this means the end of the bull run.

Still with us, our guest host, former kreitzer ceo -- chrysler ceo.

We're are not talking in s&p 500 corporation.

We are talking about all the

This text has been automatically generated. It may not be 100% accurate.


BTV Channel Finder


ZIP is required for U.S. locations

Bloomberg Television in   change