Technical Glimpse: it has found support at lower channel at around 30.50, short term bulls can eye on buying bets contemplating below fundamental reasoning but weekly technicals have still been a sell as beautifully converging downwards with the slumping prices even though it hits oversold zone (currently 14 trending at 24.8452), while %D crossover sustains on slow even below oversold trajectory, so overall intraday or for even a short term traders can smell buying opportunities for minimal profits but for another month or so we don't see any sort of strength in this commodity that can pull back from current levels.
Crude stocks at the Cushing, Oklahoma, delivery hub for WTI dropped by 302,000 barrels American Petroleum Institute mentioned.
Crude oil for delivery in February on the NYME rose to a session high of $31.38 a barrel, before trading at $31.28, up 83 cents, or 2.74%.
Good news for inventory levels: China being the 2nd largest country to import oil , in last month their imports have surged by 9.3% from a year earlier to 33.19 million tons, corresponding to 7.82 million barrels, enabling fears over fading demand prospects from the Asian nations.
So from current levels with hedging mindset we recommend shorting mid-month for target towards $25. Light Sweet Crude Oil (WTI) and options are the world's most actively traded energy product. WTI plays an important role in managing risk in the energy sector worldwide because the contract has the most liquidity and most transparency.
If puts are overpriced relative to calls, the arbitrager would sell a naked put and offset it by buying a synthetic puts. Similarly, vice versa when you think calls are getting overpriced in relation to puts.
Arbitration can also possible through box spreads where buying debit call spreads and debit put spreads for a risk-free returns. The opportunity for arbitrage in options market exists once in blue moon for individual investors as price discrepancies often appear only for a few moments.