ICE Brent futures, options hit record highs on rising volatility
By Georgina McCartney
New York, Oct 22 (Reuters) -Open interest for Brent crude oil futures LCOc1 and volumes of options traded on the Intercontinental Exchange (ICE) hit record highs last week, the exchange said on Tuesday, as conflict in the Middle East fueled volatility in the oil market.
Global benchmark Brent futures for December delivery have fluctuated between a high of $80.93 per barrel and a low of $73.06 per barrel this month, driven largely by the ongoing conflict in the Middle East. O/R
CONTEXT
Brent serves as a bellwether for global oil markets and a barometer for 75% of globally traded crude, according to the ICE.
War in the Middle East has posed a threat to global oil flows, driving higher trading activity and pushing investors to raise the geopolitical risk premium when trading crude futures.
Markets are currently awaiting Israel's response to Iran's ballistic missile attack at the start of the month.
BY THE NUMBERS
ICE Brent reached record open interest of 6.4 million contracts on Oct. 18, surpassing the previous record in April 2020, according to the ICE. Brent open interest is up a fifth on the year across futures and options.
Total oil options traded saw a record volume of more than 593,800 contracts on Oct. 15, while Brent options hit a trading record of nearly 542,000 contracts on the same day. Oil futures fell 4% on that day after Israeli Prime Minister BenjaminNetanyahu said the country would not target Iranian nuclear and oil sites.
KEY QUOTE
“We know our customers are navigating extremely challenging market conditions this year,” said Jeff Barbuto, global head of Oil Markets at ICE.
Reporting by Georgina McCartney in New York
Editing by Marguerita Choy
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