Brexit anxiety dominated markets this week after new polls revealed heightened odds of a Leave vote. From June 9th to June 16th, the GBP weakened considerably and the EUR/USD sank from over 1.14 to below 1.113. The EUR/USD drop dragged WTI Q16 from $52.28 to $46.68 despite a supportive supply/demand forecast from the IEA, a steep drop in U.S. output and continued issues in Nigeria, Canada and Libya. We think that oil’s recent weakness has been almost entirely driven by FX as we attempt to illustrate with our chart below • As of Thursday there seemed to be coin-toss odds of Britain voting to leave the EU next week. We maintain our medium term neutral-to-bearish outlook for the oil market, but feel the current FX/weak crude dynamic presents a compelling selloff to buy via tight call option spreads that could pay up to 4:1 if Britain […]