CME OPEC Watch Tool

  • 13 Jun 2018
  • By CME Group
  • Topics: Energy

All examples in this tool are hypothetical interpretations of situations and are used for explanation purposes only. The views in this tool reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This tool and the information herein should not be considered investment advice or the results of actual market experience.  CME Group expressly disclaims all liability for the use or interpretation (whether by visitor or by others) of information contained herein. Decisions based on this information are the sole responsibility of the visitor.  The visitor agrees to hold the CME Group and its affiliates and licensors harmless against any claims for damages arising from any decisions that the visitor makes based on such information. Nothing contained in this tool constitutes investment advice, nor does it constitute the solicitation of the purchase or sale of any futures or options.

Stay up to date with the latest probabilities of the OPEC meeting expected outcomes with the CME OPEC Watch Tool.

The CME OPEC Watch Tool calculates the probability of certain potential outcomes from the next Organization of Petroleum Exporting Countries (OPEC) meeting. Using WTI Crude Oil option market price data the tool calculates the implied probabilities of OPEC event outcomes. The three outcomes are generalized as ‘Reduce Production,’ which denotes a tighter policy, ‘Increase Production,’ which denotes a looser policy, and ‘Little or No Change.’  The tool then assigns a probability to each of those outcomes calculated using the nearest weekly and monthly option expirations.

Reading the Tool

1. When first launched, the CME OPEC Watch Tool will display a bar chart of the calculated probabilities from current market data for the upcoming OPEC meeting.

2. Clicking on a bar within the chart displays a recent history of the probability, including the futures price mapped against it. (Updated screenshot from Lynn)

3. Along the left, there is a ‘History’ tab. After selecting this tab, users can select from each of the 6 previous OPEC meeting dates, the tool will display the historical calculated outcome probabilities for that respective meeting.

4. Clicking the PDF icon will show two options for printing the current page information: portrait or landscape. The recommended print format for this report is landscape.

Positioning

The tab labeled Positioning on the left side of the tool displays an open interest heatmap. The heatmap shows open interest change for the options contract that is being used to derive the implied probability distribution.

1. Changes in open interest are accessed from the Positioning tab.

2. Underlying futures contract, days till expiration and previous day’s settlement price is displayed.

3. The last column shows open interest for the options being used to derive the implied probability distribution. Additionally, weekly options open interest is displayed for the user.

4. At the money strike indicated by gray shading.

Data

The tab labeled Data on the left side of the tool shows these probabilities are based on implied volatilities in the WTI Crude Oil option market price data calculated from the closest WTI option expiration month that expires after the OPEC meeting.

PDF Generation

Clicking the PDF icon will show two options for printing the current page information: portrait or landscape. The recommended print format for this report is landscape.

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Try the CME OPEC Watch Tool

Check out the CME OPEC Watch Tool and see the probability of change from the next OPEC meeting.

Go to the tool