MONDAY OUTLOOK: ENERGY MARKETS SEE VOLATILITY

In the midst of last week’s high volatility in equity index markets, it might have been easy to miss that energy markets, particularly crude oil, have seen a lot of volatility of their own lately.  Last Tuesday marked the highest single electronic volume day for Crude Oil options as implied volatility spiked to 35 percent.  Libyan exports increasing, a sluggish European economy, stock markets declining and no sign of OPEC cutting production have contributed to the recent activity.

 

But as Alan Bannister will write later this week, the increased use of electronic options in crude markets says something about who is trading and what their needs are. Participants across several continents have a need to hedge their crude oil risk in a volatile environment, and electronic trading allows them to do that at any hour, and at a low cost.

 

 

Economic Calendar:

 

 

Tuesday:

 

Existing Home Sales  10:00 AM ET

 

 

Wednesday:

 

U.S. Consumer Price Index 8:30 AM ET

 

U.S. Dairy Product Sales 3:00 PM CT

 

Thursday:

 

U.S. Export Sales 7:30 AM CT

 

U.S. Chicago Fed National Activity Index 8:30 AM ET

 

U.S. Leading Indicators 10:00 AM ET

 

 

Friday:

 

New Home Sales 10:00 AM ET

 

Cattle on Feed 2:00 PM CT

 

 

Links:

 

Jin Chang discusses CME Group aluminum contracts to kick off LME week (Futures Radio)

 

Illinois Basin – the comeback story in the U.S. coal industry (The Wall Street Journal)

 

Three teenagers introduce a game-changer for the World food supply (Modern Farmer)

 

Data indicates a slowing demand and activity in Europe (Institutional Investor)

 

Rain stalls harvest across the corn belt (Agriculture.com)

 

Steel exports in China hit a record high in September (The Wall Street Journal)

 

China’s growth is expected to slow to 3.9 percent in the next decade (The Wall Street Journal)

 

OpenMarkets is an online magazine and blog focused on global markets and economic trends. It combines feature articles, news briefs and videos with contributions from leaders in business, finance, economics and politics in an interactive forum designed to foster conversation around the issues and ideas shaping our industry.

Additional Recent Articles in News