Is this a trade opportunity? I see Crude oil Futures having a spread of $8 b/w May and June contracts. It used to be around $3-4 in the last few days. What could go wrong if I short May contract and long Jun contract.
Is this a trade opportunity? I see Crude oil Futures having a spread of $8 b/w May and June contracts. It used to be around $3-4 in the last few days. What could go wrong if I short May contract and long Jun contract.
byu/Random-username1802 inoil
Posted by Random-username1802
5 Comments
war in May and no war in June
I wouldn’t do that. If anything just long the further out contracts if you think the war will continue. If you think the war ends soon then shorting the sooner contracts is best.
I’m not an expert and that’s exactly why I wouldn’t do this – I don’t understand the reason for the difference and it sounds like neither do you. What’s your hypothesis – has the market mispriced June?
I’m just saying, going in on a hunch seldom works well. How much are you prepared to lose?
1st law of thermodynamics: no free energy
They can print more money but they can’t print more oil.
Just because America may decide to leave (the “two weeks” dodge, really?) doesn’t mean that Israel will and that Iran will stop its own aggressiveness.
And even if everyone lays down arms today, the tankers in the gulf are out of fuel, out of supplies, and are probably 2 months out from delivery assuming the crews on those boats want to continue sailing. And we are at least 5-6 months out from any semblance of normal under the best of circumstances. Not to mention the world’s worst actors (Iran and Russia) are benefiting massively from sanctions relief and high oil prices. What incentive do they have to play nice?