Today I read on Bloomberg that the most popular bets by the...

Today I read on Bloomberg that the most popular bets by the market to date have been a multitude of punts in the derivatives markets regarding the price of Oil.

The most popular move anticipated by the market is the bet that the price of Oil will rise up above $100, over the next six months.

This has some ramifications for CTP holders because this is roughly a 25% increase in the present value of all commercial oil.

With a current market cap of $55m, if CTP hits a miracle and attains 50 million barrels I calculated their share price to spin out from 6.6c at a multiple of about 6.1 which equates to about 40 cents.

In my professional experience, however, I am skeptical of this rise but there is a very small chance this can happen. I can't accurately quantify this, but it's very small.

More realistically, if we only attain half of the expected "high" target of 50 (i.e. 25 million barrels) we are looking at a target of around 24c.

At only 15 million barrels I expect a direct value of about 14c.

Once again the targets are 40c, 24c, 14c based on three very volatile expectations of commercial oil (50, 25, 15) of originating value $80/barrel.

With an oil barrel price of $100 the targets become 60c, 30c and 18c.

This has been calculated with a very conservative profit margin of 10% and ONLY includes the added value of Surprise.

I still retain my position of a long term holding regardless of whether the oil is commercial or not based on aggregate economic forecasts on world GDP and its relation to the price of oil.

If we continue the hunt for oil, then there are definitely prosperous times ahead.

Cheers.