Options market data also reveal that market participants are not gearing up for a long-lasting oil bear market.
“The so-called put skew on December Brent and West Texas Intermediate options — the premium traders will pay for insurance that prices will fall rather than rise — has narrowed more than 30 percent since early July. The skew on second-month WTI contracts has fallen by almost half. That pullback in bearish sentiment fits in with the view that the worst of the oil rout is over and prices will recover as a global surplus continues to ease,” report Mark Shenk and Grant Smith for Bloomberg.
Related: A Very Bullish Call for Oil ETFs
The third quarter is historically unkind to the energy sector, but some industry observers believe the recent pullback in crude prices is not a cause for alarm and that there is still upside available with some large-cap energy equities.
For more information on the Oil ETFs, visit our Oil category.
United States Brent Oil Fund