USOI - USOI: Multi-Year Lows In Oil Implied Volatility Look Elsewhere In Energy (Rating Downgrade)
2024-06-18 10:24:12 ET
Summary
- High jet fuel demand expected this summer with potential supply-related upside from a busy hurricane season.
- USOI offers exposure to covered call investment strategy on Reference Oil Shares, but there are bearish risks from high global oil supply.
- Implied volatility in the oil market is at historic lows, leading to a downgrade of USOI ETNs.
- I outline fundamental risks to weight and assess technical conditions in the oil market.
This summer travel season is expected to be big. Reading through a recent Goldman Sachs oil market assessment, demand for jet fuel is forecast to surpass levels from 2023 in a big way. With WTI trading around the $80 mark and Brent closer to $85, prices are not all that expensive, particularly compared to where they were just two years ago shortly after the energy price spike to above $120 on WTI. ...
USOI: Multi-Year Lows In Oil Implied Volatility, Look Elsewhere In Energy (Rating Downgrade)