WTI Crude Surges Back Above $46 On Saudi Hype But Traders Pile Into Protection
The machines are in charge again as Saudi cut hopes created just the right amount of momentum to fill the gap to the drop highs from Friday (after Iran's denial of any deal)...However, Oil volatility is spiking as hedgers pile into protection.
U-shaped recovery...
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But something very odd is going on in the Oil Vol markets...
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Seems like hedgers are very actively buying Oil protection (inverted in chart) as oil prices levitate.
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I think that Iran is now willing to freeze oil production given the fact that they are now able to return to pre-sanction levels. In addition, oil has had major influence in the global markets over the last 2 years and the need to stabilize the price of oil is more important than ever.