Oil prices have been predicted to sustain its upward movement as there are asymmetrical upside drivers for oil prices by the end of the year, according to RBC Capital Markets, which is long oil with WTI call options for June 2023 at $120 a barrel.
The increased sanctions against Russia with the EU embargo on Russian crude oil imports by sea are set to drive oil higher, managing director of Global Energy Strategy at RBC Capital Markets, Michael Tran told Bloomberg.
Volatility and choppy trading in crude oil futures are expected to continue, but investors should play the long game and give themselves time to see their view play out, Tran said.
Recession fears dominate market sentiment now, but investors should look beyond the immediate ‘palsy’ trade and be patient for their bet to materialize, he added.
This summer, the oil market was driven by fears, not fundamentals, and trading volumes in WTI were 30-40 per cent lower, which exacerbated market volatility, Tran told BNN Bloomberg.
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