Today, crude oil futures settled at an all time high of $117.48 after touching an intraday high of $117.76 a barrel. RBOB closed slightly lower at $2.98 after reaching a record of $3.00 a gallon. Moreover, natural gas closed at the highest levels since December 05’, settling at $10.72 btu. Once again, heating oil led the energy complex higher, closing at $3.31 a gallon.
The entire energy complex moved on the news of supply disruptions in Nigeria and the continuing depreciation of the US dollar. Still supported strongly by fundamentals, the energy complex has been responding to the tightening supply and rising global demand that support higher prices across the board.
How to trade this market..?
It’s not too late to make money in the energy market, there is tremendous upside left. Investors can gain exposure a number of ways; buying the physical commodity, futures, or stocks that have exposure to the energy market. For the later, investors should concentrate on stocks exposed to oil and natural gas, especially the oil/gas exploration, drillers, riggers and transport, such as; RIG, OXY, GW, and CHK to name a few.
Moreover, concentrating on crude oil, all the technical indicators point to higher prices and suggest that’s it a strong buy. In tomorrows trading session, if crude oil trades thru the 1st resistance level of $118.32 it will trade up to the 2nd resistance level of $119.17 a barrel before profit taking.
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2 comments:
I Agree completely. The only thing that will slow the bullish movement in crude is a stronger dollar and that does not seem to be in future unless Bernanke stops cutting rates.
That is true; also you have to continuously watch what the ECB is doing. The Euro has precipitous effects on the price of commodities.
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