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Will oil prices rise up to US$100? Some investors hope for it

Some oil investors are purchasing contracts that will only be profitable if the prices for oil come above US$100 a barrel over the next four years. 

14.Jun.16 3:27 AM
By Anastasia Sutulova


Will oil prices rise up to US$100? Some investors hope for it

This tendency shows that some investors believe that today’s rise of oil prices is a sign of a future boom. Some hedge funds are betting that prices for crude oil will need to rise to lower the demand. At the same time, International Energy Agency forecasts that the supply from the non-OPEC countries will sharply decline this year.

This month, one of the investors bought call options for around four million barrels at US$110 and US$80 a barrel for 2019 and 2020. The deal became public as the USA introduced new regulations. Nevertheless, the final buyer remains unknown.

 One of the most interesting facts is that last year several investors took the opposite bet and bought put options that would only pay out if crude fell below US$30 a barrel. When it did, and the prices stopped around US$26.05 a barrel, those speculators cashed in. 

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