Taking Advantage of Upticks and Optics | S6 E25

World of Oil Derivatives

Brent Futures have been volatile and rangebound this week, dropping to around $81/bbl and supported again over $84/bbl. With the OPEC meeting next week (and being held online), there's been conversation that Russia has overproduced oil output, but will be correcting lower after not adhering to the April quota due to over production. This audit will be used to update production baselines.

Biden announced he was releasing a million barrels of gasoline from the northeast gasoline supply reserve ahead of July 4th. In reality, this has been planned for a long time and isn't reflective of the optics he has been given. Both sides are claiming that he's falsely pushing down the price. While Biden claims it will help with inflation, it was actually a bipartisan bill that was passed years ago, and it was actually Trump who wanted to sell this stockpile originally. The team ask the question: Is this just wasting money?

The team discuss the latest impact of recent world events like the Singapore Airlines turbulence death, the impact on people's psyches, and in turn if that has an impact on the market. They dive into the real estate market, where more houses are being listed for sale in the US - which looks like a result of rising unemployment rates. They explore how different demographics look at property and discuss whether young Brits believe it's even possible to buy a home.

Macro Specialist James Brodie explains the massive complacency in the market this week. We've gone from one extreme to another. He discusses the VIX and volatility. Equity volatility is at four-year lows, interest rate volumes at one-year lows, and all the action is in the commodity markets. With unemployment rising and retail sales falling aggressively, the Fed is unlikely to hike.

The trade idea for this week is to buy the July Gaspnap.

If you would like to connect with any of our hosts on LinkedIn, please click on the hyperlinks below:
Greg Newman: https://www.linkedin.com/in/oilderivatives/
James Brodie: https://www.linkedin.com/in/jamesbrodiecmt/
Martha Dowding: https://www.linkedin.com/in/martha-dowding-ab84801a6/\
Mita Chaturvedi: https://www.linkedin.com/in/mita-chaturvedi/

Chapters for this episode are:
0:00 Welcome
1:15 Brent Futures
6:10 Refinery margins
15:07 Singapore Airlines & major events affecting the market
20:23 Market volatility & the VIX
25:52 Macro market news & debate
43:16 "Googling oil:" world oil news
52:55 Trade idea of the week
59:05 Outro