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Hansen: Why the price of crude could be in for a correction

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Speculative bets on rising Brent crude oil prices are at an all-time high. By April 21st net-longs jumped by 8,351 lots to 271,929. Saxo's Ole Hansen says the reasons are two-fold: supplies are flattening out and geopolitical risk associated with Yemen has added some support.

But is this really the recovery the markets have been waiting for? Hansen cautions that in the near-term the market may have reached a level where there's a danger it needs to correct itself. 

He says #SaxoStrats has just issued a June 15 put spread on WTI (read it here) because of the belief it could be running out of steam. As for Brent, Ole says momentum is still positive so those holding longs should stay put BUT keep a sharp eye on the levels, in case their's a move to the downside.