10-22-07 by dugan
How the heck would oil prices hit $100 a barrel? Because oil speculators really, really want it to. The Wall Street Journal’s Matt Chambers has a concise summary today, noting that futures options betting on $100 oil before the end of the year far outnumber contracts betting on a mere $80. Key excerpts:
"The large number of options held to buy crude at $100 a barrel could also act as a pull on prices toward that level. …
"As of Thursday, there were nearly three times as many
options held to buy the December crude-oil-futures contract at $100 a
barrel as there were to sell the contract at $80, according to Nymex
data. Friday data weren’t available."Concentrations of bets on options at certain levels
can act as a magnet for crude-oil prices as the options-expiration date
approaches, as big traders try to push futures prices to levels where
their options positions become profitable. Options on the December
contract expire Nov. 13."
Oil prices are down around $86 a barrel today, along with the Dow and other economic indicators. But if oil speculators, including oil companies themselves, have anything to say about it, $100 a barrel obviously is still on the table.