Not only did the November WTI crude oil futures contract just make a new high in this cycle, up $5 to $109, before reversing...but the 2027 contracts are moving higher as well. Why? The possible reality of higher-for-longer oil prices is sinking in, suggests Peter Boockvar, editor of The Boock Report.
For example, the May 2027 WTI futures price just traded above $90 for the first time. While not good for users of crude (aka the refiners) in terms of margins and consumers of their products, it’s what investors such as us in exploration and production and service companies want to see.
May 2027 WTI Crude Oil Futures Price
In the AI space, the standoff between credit and equity participants is quite fascinating at CoreWeave Inc. (CRWV). While CoreWeave still has about $35 billion of equity market cap, the five-year Credit Default Swaps just closed at 1,089 basis points (down 38 bps on the day).
That means it costs almost $1.1mm per year for five years to hedge against $10mm worth of CoreWeave bonds. That implies about a 55% chance of default – and if it were to be the case, the equity would likely have no value. Who will be right?