Traders Bet Big on Oil Futures Despite A Stagnant Market

Despite geopolitical tensions and a tumultuous start to the year, oil traders are increasingly investing in oil derivatives, pushing open interest in oil futures contracts to its highest level since March 2022. This surge, involving about 660 million barrels of oil derivatives, occurs despite crude oil prices remaining within a narrow $10-a-barrel range. The activity reflects not only seasonal trends of portfolio rebalancing but also concerns over political risks, such as the redirection of oil tankers around Africa due to conflicts in the Middle East, economic uncertainties including interest rate outlooks, and the potential for Chinese economic recovery.