Having briefly reached bull market status (ripping 20% off last week's lows), WTI crude oil is collapsing again this morning as the reality of excess supply and dwindling demand crash on the shores of manipulated futures and ETFs. However much hope was imbued into this rally as "setting the bottom" for oil, it seems the rally was used by 'investors' to hedge the downside as bets on a bearish plunge have soared to record highs.
Hope fades for a big stimulus package...and Saudi Aramco spoiled the party...
And reality hits oil with the chaos in financial markets remaining...
As the last week has seen bearish bets soar to record highs...
As Bloomberg reports, bets that crude oil will retreat below $25 a barrel have reached an all-time high as stockpiles continue to grow.
Open interest, or the amount of total contracts outstanding, for March West Texas Intermediate crude $25 put options rose to 29,023 on Jan. 22, the highest among all March WTI options. The puts expire on Feb. 17.
"There is a big debate surrounding $25," said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. "A lot of people believe that we are going to test that area before we bottom."
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