Market Commentary von Patrick Heusser, Crypto Finance AG
The decision made by OPEC to reduce output only had a very short-term effect on the physical (or spot) oil price.
The spike up to $29 in the front contract was reversed quickly, and, currently, we are trading just below $20.
The crazy part in this is the futures curve. It is heavily in contango. The steepness comes close to certain crypto futures we followed in the past (see image oilfutures).
As a quick comparison, the current futures curves in crypto are looking rather flattish or even in backwardation (see images altcoinfuturebasis and btcfuturebasis).
But back to the curve of oil futures. A few weeks ago, I was listening to an interesting podcast about a possible trade on the back of this already then steep curve. The trader suggested that one should lease an oil tanker. The leasing rates were very low a few weeks ago due to the total collapse of global trade. Buy spot oil, sell at the back end of the oil futures curve, and roll in the steep contango (roughly 75% annualised yield).
I agree that this is not an easy trade to execute, and also am aware that there are many additional tasks and risks to consider.
In the cryptocurrency investment space, you can set up similar trades, but much easier and less capital intensive (compared to buying or leasing an oil tanker). If you are a miner and follow the futures basis, you can profit from the steepness of the curve with the coins you do not immediately need to sell to fund your mining operation.
This curve play is available for everyone who has access to spot and derivatives crypto trading platforms.