How We've Been Profiting on Oil's Wild Moves
Crude's whipsaw "roller-coaster ride" won't last forever
By Dr. Kent Moors, Global Energy Strategist, Money Morning
Government shutdowns, geopolitical angst, protracted instability inside the Beltway, and outright market manipulation are combining to make this a profoundly volatile, unsettling time.
On Wednesday, for instance, both West Texas Intermediate (WTI), the benchmark crude rate set in New York, and Brent, the more widely used oil trading standard set in London, spiked ferociously - more than for any one session in well over a decade. WTI ended trading up by 8.7%; Brent by 8%.
With these spikes coming after historic price declines, everyone in the media is now looking for the oil price "floor" that can enable steadier upward moves.
I don't expect that floor to be a factor until into 2019. Year-end tax sales, low holiday volume, and institutional portfolio adjustments mean any floor, if it shows up, probably won't register until January.
And yet, these kinds of violent swings can be remarkably profitable. Late last week, my Energy Inner Circle readers following along got the chance to close out a 1,000% profit on a Brent "straddle" - a call and a put expiring on the same date at different strike prices - that saw us play the "up" and the "down."