Anthony Scaramucci, the founder of SkyBridge Capital, expects crude oil prices to reverse their massive spikes, predicting that the global market will stabilize once current supply chain anxieties subside. He also highlights that the Wall Street veterans know how to play on the current volatility in the commodities market.
Navigating the Volatility Trade
Speaking on a recent PBD podcast panel, Scaramucci addressed the unprecedented price swings rocking global energy markets.
After Brent and WTI crude briefly touched $120 on March 9, markets have already begun to cool. At the last check, Brent is currently hovering near $95.82, while WTI has settled around $90.57.
Drawing on his experience at Goldman Sachs’ commodity division, Scaramucci noted that Wall Street veterans know how to navigate these abrupt fluctuations. They “get in there and get long oil and play the volatility trade,” he explained, profiting off the market’s initial panic.
“My prediction, [is that prices] will trend lower back to where they were at the beginning of the year,” Scaramucci stated, emphasizing that the underlying economic fundamentals remain intact.
The Cost Of Shutting Down
The recent surge in futures was driven by fears of disruptions in vital global chokepoints like the Strait of Hormuz, which facilitates a massive percentage of the “world’s oil” supply.
When access to these transit routes is threatened, regional producers must halt operations because there is simply nowhere to store the excess supply.
However, Scaramucci pointed out that “shutting down” production is complicated. “Unfortunately, it’s not like an on and off switch,” he warned. It can take three to six weeks to restart extraction and bring operations back to full capacity.
Relying On Strong Fundamentals
Despite the mechanical delays in restarting foreign oil flows, the panel agreed that Western production continues at a healthy “business as usual” pace.
With baseline extraction costs sitting comfortably below current trading prices, producers in North Dakota and Alberta remain highly profitable.
Ultimately, Scaramucci argues that once the immediate uncertainty clears, the market will inevitably “trend lower” and return to a stable baseline.
WTI Tracker Jumps Nearly 55% YTD
United States Oil Fund LP (NYSE:USO), which tracks the WTI Crude futures, was up 18.01% over the last five sessions and 54.93% year-to-date.
Also, it has returned 48.01% over the last six months and 51.22% over the year. On Wednesday, it closed 2.07% higher at $108.05 and it was up 4.86% in premarket on Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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