Tidbits, Crude Oil & Iran, Put Options Concept 3/15/26
- Wright team
- 2 hours ago
- 5 min read
Tidbits
Russia was selling oil at just $50 a barrel to India and China. Now that India has a waiver to buy Russian gas and oil, Russia is telling India it will not give any more discounts. Russia is charging India $90 a barrel according to energy expert Amos Hochstein.
Many producers of crude oil like to lock in a profitable price for future production when possible. Most producers know within a few bucks what their cost of production will be for the year ahead because most of their costs are fixed and production is also fixed. Their production costs are not influenced by droughts, insects, fungi, fertilizer, etc. Consequently, they lock-in profitable prices by hedging with futures contracts.
We report every week as part of our Weekly Basis what the commercials traders did the previous week as far as did they buy more corn (wheat or beans) than they sold or sell more than they bought using information from the Commitment of Traders Report (COT). Crude oil producers are also commercial traders on the Commitment of Traders Report (COT) for crude oil.
After reviewing the net position of commercial crude oil traders, the number of short (sold) contracts diminished as the crude oil price approached $60. When the price of crude oil dipped below $60, the commercial traders held just 3% of the crude oil open interest (all crude oil futures contracts on the books). When the price of crude oil was in the $80 range, commercial traders held about 20% of the open interest. Twice during the past ten years commercials held as much as 30% of the crude oil open interest. So what?
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