Morgan Stanley: Oil Traders Are "More Precise" With Risk As Wars Drag On

By Michael Kern of OilPrice.com

Uncertainty about how the wars in Iran and Ukraine will unfold is keeping many traders away from taking positions in longer-dated futures contracts, according to Morgan Stanley.

Most traders have now moved to bet on futures prices within a three to six-month period, instead of longer-dated futures contracts, as volatility has spiked and uncertainty has grown regarding where the wars are going and how much they would continue to impact the global oil market.

“People have been more precise with their risk,” Brendan Ross, Co-Head Global Oil Trading at Morgan Stanley, said at the Asia Pacific Petroleum Conference in Singapore on Wednesday, as carried by Bloomberg.

“They’ve decided what they really want and what’s an unexpected bleed,” Ross added.

Many traders are ditching too risky bets and are piling up in near-dated futures contracts as they don’t want to be caught on the wrong side of the longer-dated bets amid high uncertainty about the Iran and Ukraine wars, according to the expert.

This shift into near-dated futures has sapped liquidity in the longer-term contracts, Ross noted.

Meanwhile, speculators and portfolio managers have recently READ MORE AT SOURCE »