The Iran War Commodity Shock – Where Are Futures Traders Positioned For The Long-Term

Brent crude futures for immediate delivery were recently trading at $102.50, while delivery in March 2027 was priced at $81.39. Mehrota said that a steep drawdown in short-term oil inventories was the reason for the price curve. However, IEA Executive Director Fatih Birol told reporters on Monday ​that commercial oil inventories had only a few weeks’ worth of supply left, according to media reports. The U.S. released 172 million barrels of crude oil from the Strategic Petroleum Reserve as part of a global effort to release 400 million barrels of oil and refined products to boost supply, the Department of Energy announced in March. Trending: Investors With $1M+ Often Use Advisors for Tax Strategy — This Tool Matches You With One in Minutes Mehrotra added that lower prices for future delivery tend to reflect the immediate need for oil now, versus in the future. The futures market "is telling any participant in this market that the current market is very tight—you don't put oil into storage, you pull it out," he said. Mehrota suggested that volatility in the market was also affecting price discovery for long-dated futures. Backwardation in futures markets occurs when contracts for immediate delivery are priced higher than future months. While longer-term contracts were hinting at optimism, Minneapolis Fed Economist Neil Mehrotra said in an article posted on the branch's website. "We should take relatively less comfort in what the long-dated futures are saying," he said. Become a futures trading pro, without spending any money – why Plus500 is the top choice for beginner investors For active futures traders looking to navigate volatile macro-driven markets like crude oil, some firms such as Apex Trader Funding offer funded trading programs that allow qualified traders to access larger buying power after passing an evaluation, rather than trading only personal capital. An economist at the bank is cautious about that outlook due to depleted inventories, with the International Energy Administration warning that only a few weeks of supply were left. The futures market was split between pessimistic speculators and bullish commercial traders, Data from Arc Research showed. Nearly three months into the U.S.-Israeli war with Iran, oil futures were trading in "backwardation," highlighting optimism over the reopening of the Strait of Hormuz, according to the Federal Reserve Bank of Minneapolis. Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Story Continues See Also: What If Your Investment Income Didn't Rely Entirely on Market Swings? Some Investors Are Taking a Different Approach Commercial Futures Traders Are At Odds With Speculators Arc Research said there was "a significant and widening divergence" between commercial traders and speculators for the week ended May 15. Commercial futures traders continue to take a bullish stance, while money managers are pessimistic. Managed Money traders are currently net short minus 43,791 contracts, which is a multi-month low and increases bearish sentiment among speculators. In contrast, Producer/Merchant (Commercial) traders increased their net long position to a positive 134,142 contracts, which can highlight physical demand or hedging, Arc Research said. This divergence in price action was a "classic setup" for a short squeeze, the report added, saying that commercial positioning can be a more reliable indicator of medium-term price trends. Read Next: If there was a new fund backed by Jeff Bezos offering a 7-9% target yield with monthly dividends would you invest in it? Building Wealth Across More Than Just the Market Building a resilient portfolio means thinking beyond a single asset or market trend. Economic cycles shift, sectors rise and fall, and no one investment performs well in every environment. That's why many investors look to diversify with platforms that provide access to real estate, fixed-income opportunities, professional financial guidance, precious metals, and even self-directed retirement accounts. By spreading exposure across multiple asset classes, it becomes easier to manage risk, capture steady returns, and create long-term wealth that isn't tied to the fortunes of just one company or industry. 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