Amwal Al Ghad English - 2015-12-23 08:26:36
At the tail end of 2008, the last time oil prices traded at $35 a barrel, some vacationing oil traders missed out on an abrupt $16 surge that helped define the bottom of a five-month, crisis-induced collapse.
Few expect a repeat this holiday season, however, even as market liquidity has fallen by more than half, increasing the chances of a lurch in a thinly traded market.
While dealers and analysts interviewed by Reuters this week expressed a cautious stance heading into the holiday period, few said they were positioning to benefit from even a short-term recovery, and bullish $38 to $42 options volumes were muted.
"The best trade right now is no trade," said one trader.
The comparison to 2008 emerges from the coincidental timing of unexpectedly low prices. On Dec 24, 2008, Brent crude hit $36.20 a barrel, its lowest level since July 2004 amid the financial crisis. This week, it dipped below that point for the first time since 2008.
Seven years ago, prices abruptly turned higher, rising for six of the next seven trading days to gain 44 percent, or $16 a barrel. They then traded sideways until April. More»