Five oil signals to watch in 2018 - BBG

Bloomberg is out with the five key barometers to watch out for in oil markets as 2018 unfolds:

1. The Shale Signal

WTI’s discount to Brent closed at its widest level in more than two years on Tuesday. With shale growth driving forecasts of record U.S. supply in 2018 that could lead to a further expansion in the spread. 

2. OPEC’s Bellwether

Brent crude surged into a bullish, backwardated structure this year as OPEC-led output cuts tightened global supplies. December 2018 futures climbed to their highest premium ever versus the same month for 2019 this week, and the spread may expand further as OPEC’s cuts drive the oil market toward balance next year

3. Lottery Tickets

With geopolitical risks flaring in a host of major oil producers, funds have been busy snapping up bullish oil options contracts that would profit from a sharp spike in crude prices. 

4. Volatility Vacuum

Despite those risks, volatility has plunged to the lowest in more than three years in recent weeks as a steady grind higher in prices took some of the fizz out of the oil market. 

5. How Long?

The market is heading into 2018 near a record number of bullish bets in Brent and WTI combined, exchange data show. Those contracts, which now outstrip bearish ones by seven to one, have led to concerns that crude may soon see a speculator-driven slump.