The Federal Energy Information Administration reported on Thursday that U.S. crude oil imports in May rose 7.7% to 9.622 million barrels a day -- the second-highest monthly total since January 2009. This news came after Exxon Mobil Corporation (XOM) reported an analyst-beating profit of $1.60 per share. In fact, XOM's second-quarter earnings jumped 91% from the year-ago period, boosted by higher commodity prices and an increase in refining profits and production.
While the shares initially jumped higher on the news, XOM has since pulled back to support from its 10-day and 20-day moving averages, both of which are located just beneath the $60 level. These short-term trendlines have supported the stock for the past two weeks, during which time XOM has staged a rally. In fact, this duo recently completed a bullish cross, suggesting that XOM may have more fuel in its latest uptrend.
Yet option players are highly skeptical of the shares, as indicated by XOM's Schaeffer's put/call open interest ratio (SOIR) of 0.84, which ranks in the 97th annual percentile. In other words, short-term traders have been more bearishly aligned toward XOM just 3% of the time during the past 12 months.
This skepticism was palpable on Thursday, with the August 57.50 put seeing volume of 6,413 contracts traded -- the majority of which changed hands at the ask price, indicating they were likely bought. Open interest increased significantly overnight, revealing that fresh bearish positions were added at this strike -- which is coincidentally the home of peak put open interest for the August series.
This particular strike called out to back-month traders, too, as roughly 3,600 contracts crossed the tape on the September 57.50 put. Open interest increased by 2,707 contracts overnight, revealing buy-to-open activity at this out-of-the-money strike. In fact, just like the August series, the September 57.50 strike lays claim to the title of peak put open interest for the back-month series.
However, XOM is trading just above the $60 level, so these heavy accumulations of put open interest below the stock's current price could actually serve as a form of options-related support for the energy issue. With XOM poised for a bounce off short-term trendline support, a capitulation by the bears could be the fuel XOM needs to continue its latest ascent.
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