January West Texas Intermediate $70 puts, which allow an investor to sell futures at that level, have soared more than 40-fold from two months ago as the U.S. benchmark has plunged almost $25 a barrel.
OPEC's decision to cede no ground to rival producers underscored the price war in the crude market and the challenge to U.S. shale drillers. The 12-nation group abandoned its role as a swing producer, ignoring the steepest slump in oil prices since the global recession to keep its output target unchanged.
OPEC is all in and will continue to flood the globe with oil in an effort to bury the U.S. shale crude oil producer. OPEC will continue to produce over 30 million barrels a day adding to the globes 2 million barrel a day of overproduction.
Oil rallied further after the leaked Fed story. Apparently the Fed did not want the market thinking that rates were going up anytime soon so they dropped a dime to their buddy Jon Hilsenrath at the Wall Street Journal.