Market has interpreted OPEC's decision to taper voluntary cuts from October, '24 as bearish.
Further, unexpected increase in reported stock of crude oil, gasoline and distillate in US has added to the bearish sentiments.
Crude Oil price have softened this week, with oil traders adding further shorts on the WTI and Brent.
However, OPEC may roll back voluntary cuts if the crude oil price soften significantly. And the supply of crude oil is fairly balanced till Q3, which has prompted some commentators to suggest that crude oil is over sold for front months.
While geopolitical tensions in Middle East and Ukraine continues.
How retail investor benefit from the market situation?
Share price of Energy companies like Chevron, Exxon, Devon, Phillips66, Hess, Valero etc closly follow crude oil prices.
Therefore not surprisingly, stock of these companies have experienced a sell off. IV of options has plummeted and the Calls are cheap at the moment.
Buy 90-120 days Call options [or Bull Call Spread] at 0.35 delta of any of the major US listed energy companies.
Posted by Option_Closeout