Oil traders are stepping up their bets in anticipation of a supply surplus by late 2025, driving a surge in activity across the crude market. Bloomberg reports citing CME Group data that open interest in WTI calendar spread options hit a record high. These instruments allow traders to speculate on price gaps between oil contracts with varying delivery dates.
The news agency notes that oversupply concerns are growing amid OPEC+'s planned production increases and escalating trade tensions between major global economies. While current market conditions remain balanced, investors are bracing for significant shifts in the coming years. The persistent supply shortfall expected through late 2025 is likely to flip into a crude surplus by 2026.
Energy Aspects Ltd. notes that heightened volatility and geopolitical risks are making these investments increasingly attractive to traders. Supply uncertainties surrounding Russia, Iran, and Venezuela are making holding futures difficult. As a result, market participants are turning to more flexible instruments, such as spread options.