Crude gains: Oil surges 5% as some take profits
Some traders took profits on short positions after prices this week hit their lowest since 2009
LONDON:
Oil closed up as much as 5%, its biggest gain in over two years, as some traders took profits on short positions after prices this week hit their lowest since 2009. A sharp bout of short-covering prior to expiry of the US January crude oil contract alleviated pressure in a market dominated by sellers the past six months and lighter-than-usual pre-holiday volume exaggerated the rise on a day that otherwise lacked much in the way of headline news. While some traders may be betting that $60 a barrel Brent represents a likely floor for the market, others remain unconvinced. With uncertainty high, demand for options has surged this week, with the CBOE crude oil volatility index soaring to its highest since 2011.
Published in The Express Tribune, December 21st, 2014.
Oil closed up as much as 5%, its biggest gain in over two years, as some traders took profits on short positions after prices this week hit their lowest since 2009. A sharp bout of short-covering prior to expiry of the US January crude oil contract alleviated pressure in a market dominated by sellers the past six months and lighter-than-usual pre-holiday volume exaggerated the rise on a day that otherwise lacked much in the way of headline news. While some traders may be betting that $60 a barrel Brent represents a likely floor for the market, others remain unconvinced. With uncertainty high, demand for options has surged this week, with the CBOE crude oil volatility index soaring to its highest since 2011.
Published in The Express Tribune, December 21st, 2014.