Thought of this as I saw the further-out Dec'22 & Jun'22 6-months spread flipping through the closer Jun'22 & Dec'21 ; the historical examples are given in the chart in green circles.
Seems like oil is looking higher from here as per the indication of the attached chart.
Let us see how this unravels.
I find it interesting that I got many comments on my call to remain short oil. I would like to expand on this concept. First thing to point out is no one asked me how I plan to short or, and what part of the oil complex i am shorting, and additionally is there anything in the sector I am long.
Second part is the price is low and looks attractive to be long, but...
A potential low-risk setup on this CLM2020-BBM2020 spread ; Brent to trade at a discount to WTI - very unlikely. Optimal entry around -2.40 , risk of $3k per contract with a potential 1R-1.5R return before the expiry of these contracts at the end of April.
Brent (UKOIL) is on the slippery path as production is falling and this could lead to the drop of it's share and loss of the benchmark status to other crudes, namely WTI or Dubai or Urals.
Triangle is possible model here.
Target minus $10 spread - the WTI (USOIL) becomes more expensive than Brent.
