Digital Currency Revolution Series: Ethereum’s Bullish Portrayal On Both Fundamental And Technical Drivers
Cryptocurrency Derivatives Series: Why Bakkt’s Custodian Service Amid Its Crypto-Derivatives Launches?
Blockchain Revolution Series: Wirex Launches ‘Visa Multicurrency Travelcard’ To Target Borderless Payments in APAC
Cryptocurrency Derivatives Series: Tassat Just Yard Away From Crypto-Derivatives Business, Seeking CFTC Approval
FxWirePro: Spot The Divergence Between WTI and Brent and Carry Crude Trade Basket
WTI and Brent prices has diverged recently, with WTI extending losses of -1.45% from last 3 days (currently trading at $55.30 level), while Brent surged 2.01% so far in this week. WTI’s slumps came after reports show US diesel and gasoline stockpiles increased on the week.
Distillate supplies rose 2.6mil bbl in the week past, against expectations of a -0.3mil bbl reduction in a Bloomberg poll.
The spread between WTI and Dubai oil prices have shrunk to about $1/bbl, the tightest since April 2018. It is likely that any correction may have to come from WTI as high prices dampen demand for US crude exports.
Updates on crude oil derivatives trades: In crude oil segment, we initiated a risk reversal strategy by going long in Brent Dec’19 10D call versus short Dec’19 10D put. They also went tactically short Brent-Dubai Q3’19 swap spread due to mounting risks from Iran sanctions.
Hence, contemplating above developments, crude oil derivatives trades are advocated on hedging grounds: WTI crude directional hedge is advised, by maintaining shorts in CME WTI futures for August delivery for arresting downside risks in short-run, simultaneously, longs in CME WTI futures of September’2019 month deliveries.