Oil traders wager on $250 oil by June 2024 as Israel-Iran conflict elevates

Devika Krishna Kumar and Alex Longley, Bloomberg April 16, 2024

(Bloomberg) – Oil traders piled into more than 3 MMbbl worth of options contracts in a bet that prices would spike to $250 a bbl by June as geopolitical risks remain elevated.

About 3,000 lots of June $250 call options in U.S. crude traded for a penny each on Tuesday, according to data compiled by Bloomberg. It was likely a “lottery ticket” that might pay off if prices spike to unheard of levels by the middle of next month, although the trade appeared to be paired with $25 put options, which could also signal a broader macroeconomic strategy, some traders and brokers said.

Volumes of bullish oil options have skyrocketed to a record, driving the premium for calls over puts jumped this week to the highest since October, as Israel vows to retaliate following Iran’s missile and drone attacks over the weekend.

U.S. crude futures have rallied above $85 and Brent is trading near $90 as worries that the conflict will widen are heightened by a backdrop of tight supplies and robust demand.  

Connect with World Oil
Connect with World Oil, the upstream industry's most trusted source of forecast data, industry trends, and insights into operational and technological advances.