I need a market maker for WTI/Brent spread options. None of the locals or market makers want to touch them. None of the trading firms or the banks I've spoken with want to make them. Does anyone know who is "active" in this market? Have a contact?

RWE Trading, Vitol, Glencore, Trafigura???

Trafigura declined to make and Glencore isn't too active in vol trading from what I understand. I have no contact at RWE or Vitol.

try citadel, they have an active energy vol desk.

Also not interested unfortunately. I've heard DE Shaw or J. Aron may dabble in them but I don't have a contact at either for CL vol.

Sorry for the ignorance, but i was wondering if someone could explain the massive spread between the Brent Crude and WTI. Today, the spread of the 1st contact is traded at 22.7$ in favor of the Brent. How far can this go?

Sorry for the ignorance, but i was wondering if someone could explain the massive spread between the Brent Crude and WTI. Today, the spread of the 1st contact is traded at 22.7$ in favor of the Brent. How far can this go?

High volumes at Cushing and more international demand for Brent are the standard responses to that.

Yet, 20$ (or more, today) is way too wide (even with the "so called" fundamental reasons). Looking at the WTI-LLS spread you can see that it has been quite stable recently, however, the LLS-Brent spread has been the trigger for the collapse of the WTI-Brent spread. I don't see this arb sustain for long (or at least a limited downside of the spread). Nonetheless, trading this spread with the outright futures is too risky (I believe that part of the overshoot of the spread is due to stop-losses/margin calls of speculative accounts), so maybe a Call on the spread option is better given the current price action (a 3-month put is currently priced at 2.8% mid-market)

QuoteOriginally posted by: VolMasterYet, 20$ (or more, today) is way too wide (even with the "so called" fundamental reasons). Looking at the WTI-LLS spread you can see that it has been quite stable recently, however, the LLS-Brent spread has been the trigger for the collapse of the WTI-Brent spread. I don't see this arb sustain for long (or at least a limited downside of the spread). Nonetheless, trading this spread with the outright futures is too risky (I believe that part of the overshoot of the spread is due to stop-losses/margin calls of speculative accounts), so maybe a Call on the spread option is better given the current price action (a 3-month put is currently priced at 2.8% mid-market)http://ftalphaville.ft.com/blog/2011/06 ... brent-wti/

I don't buy these theories. Like the 2008 rally in oil where analysts said oil is going to go to 200$ and then collapsed to 30$/Brl. My view is that trend-following models and stop-losses/margin calls caused the spread to widen to exponential price action. Today the spread has narrowed across the term-structure by an average of 2.5$QuoteOriginally posted by: niki5QuoteOriginally posted by: VolMasterYet, 20$ (or more, today) is way too wide (even with the "so called" fundamental reasons). Looking at the WTI-LLS spread you can see that it has been quite stable recently, however, the LLS-Brent spread has been the trigger for the collapse of the WTI-Brent spread. I don't see this arb sustain for long (or at least a limited downside of the spread). Nonetheless, trading this spread with the outright futures is too risky (I believe that part of the overshoot of the spread is due to stop-losses/margin calls of speculative accounts), so maybe a Call on the spread option is better given the current price action (a 3-month put is currently priced at 2.8% mid-market)http://ftalphaville.ft.com/blog/2011/06 ... brent-wti/

Send me a PM.Might be able to hook you up.

Just use CFDs and long/short yourself. Easy, e.g. CityIndex.

I think another (lesser) reason is that Libya's oil was quite clean, like Brent, and WTI is dirtier ('sour', more sulphur). Sounds plausible. And Cushing's full of inventory with nowhere to go.