Morgan Stanley: The rise in oil prices masks the fact that the fundamentals of the oil market are weak.

Abstract: Internationally renowned investment bank Morgan Stanley released a report on Monday (August 15th) that the rise in oil prices driven by options traders masked the fact that the fundamentals of the crude oil market were weak.

On August 15th, internationally renowned investment bank Morgan Stanley released a report on Monday (August 15th) that the rise in oil prices driven by options traders masked the fact that the fundamentals of the crude oil market were weak.

Morgan Stanley said in the report that oil prices have risen sharply due to short covering by traders, but the basic fabrics in the market are still weak in the coming months.

"And the fairly large September US crude oil put option exercise price is 40, 45 US dollars per barrel, higher or closer to the market price, causing traders to hedge against exposure," the bank said.

At the same time, Morgan Stanley warned: "Once the date of August 17 expires, the impact of the initiative will fade."

In addition, the bank also pointed out that the comments of the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) also helped reverse the bearish sentiment. OPEC crude oil production record (although seasonal), coupled with increased Libyan crude oil exports, Iraq's output growth trend may continue into 2017, increased bearish signs.

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