Trading Corner | Don't Get Caught in the Bear Trap! | Ep 7

World of Oil Derivatives

Manny and Jonah analyse recent market trends and trading strategies in the oil sector. While the market has been relatively quiet but volatile, with crude oil prices settling in the high 70s per barrel, there is speculation around geopolitical risks - such as potential disruptions in the Strait of Hormuz and the impact of increased crude production in Libya. Manny points out that a sell-off in a specific part of the market curve, mainly due to excess supply and hesitant refiners, has led to a bearish outlook. She cautions about the potential bear traps, stressing that traders need to stay cautious when the market is unpredictable.
Financial traders are heavily short, anticipating continued bearish fundamentals. Meanwhile, physical traders face an oversupply situation, leading to aggressive selling. The market dynamics show herd mentality, where traders follow each other, causing rapid price movements without substantial trading activity. Jonah compares this scenario to past market behaviours in credit and crypto markets, emphasising that the current range-bound state has pushed momentum traders into uncertain territory. Despite the bearish sentiment, they suggest that a small event - like a refiner stepping in - could cause a swift price rebound, advising caution.
#oott #geoplitcalrisk #oilandgas #Israel #Iran #MiddleEast #Oilmarkets #bearish #beartrap #straightofHormuz
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