Trading in oil futures is now as heavy as it was in the first months of the COVID-19 crisis, according to market data and analysts, with oil bulls and bears rushing to hedge against jolts in the steady rise of prices.
"What makes the current situation so pronounced is ... the duration of uncertainty around how the resolution will pan out," said Marc Rowell, senior energy broker at Britannia Global Markets. Open interest refers to a trader's position in the market, long or short, and reflects their sentiment over future value.
"The potential for continued crude oil price increases is an incentive for physical market buyers to secure a contract rate at present levels in case prices continue to rise."Underscoring the instability is a disconnect between the four-month surge in the futures price and slow physical crude sales - with global demand expected to match supply only later in 2021.