Even after oil prices rose over the past week due to OPEC’s surprise production cut, oil traders don’t seem to believe prices will continue to rise. In fact, oil futures contracts seem to expect prices to fall after a short-term price shock.
While the price of the latest Brent crude oil futures, the international benchmark, rose 6.6% to $85.05 a barrel, from the week to Thursday, the price of oil futures due in December 2023 was up 4. .6%, up 81.50 USD. The fact that December futures are trading at a discount to today’s prices seems to be bearish: Why buy oil stocks if oil prices will drop by year’s end? But the current trading pattern, known as a reversal, has actually been a bullish signal in the past and could be more beneficial for oil prices and stocks. On Monday, the
Energy choose industry SPDR
exchange-traded funds rose 3.9%.
