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US Oil Trading for the week 03-07 Mar 2014

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This week will be crazy for trading binary options on oil. We have chosen to trade the US based Light Sweet Crude contract for a variety of reasons - for starters there are extended trading hours on it and secondly its volatility has been immense in the past couple of weeks. After the market turmoil triggered by Russia today we are seeing a lot of opportunities to trade it. Let's have a look at our chart - we are seeing a sharp spike higher today that resulted in a top around 104.83 - that is the level that needs to be sustainably broken on the hourly chart to trigger a call trade on our side. On the downside we have substantial support in the 103.20-30 area. Should we see a close below we would be purchasing daily put options for Tuesday. Stay tuned to the comments section below in order to optimize your trading opportunities in oil this week.

USOil_03032014

Comments

Matt T.'s picture

Prices have dropped to test the lower band of the range and our targeted support level at 103.20. We will be buying puts on a sustained hourly break below 103.10-20 area. As of right now we are observing a rebound to levels around 103.40. The drop was triggered by news that Vladimir Putin has ordered troops exercising close to Ukrainian borders to get back to base. The news has triggered a broad rally of risk assets and a sell-off in Gold and Oil. How long will the market keep this stance - it remains unknown as geopolitical tensions are driving market decisions in a heavy way right now.US Oil Chart 04 Mar 2014

Matt T.
Matt T.'s picture

As we predicted succesfully, yesterday's break lower has opened the flood gates and prices on US Oil futures have fallen in a rather dramatic fashion. With the main concern surrounding Russian-Ukrainian affairs behind us we are seeing a very significant drop in prices. We maintain our put bias, but you have to take into account that there might be some correction at this point in time. Prices have hit previous bottom around 100.80 and we are now seeing some consolidation. We maintain our bias - looking for a rally in prices to about 101.80 - which is $1 above the low and we would buy daily puts for tomorrow's expiry. That is unless tensions in Ukraine increase again.US Oil Chart 05 Mar 2014

Matt T.
Connor Bruce's picture

Oil prices have stabilized this week after falling roughly $8 a barrel in the previous two weeks with NY oil trading round $90 a barrel and London around $111.

Connor Bruce (not verified)
Anthony Stanley's picture

The weekly stocks report showed US crude inventories climbing by 3.8 million barrels last week as refinery utilization dropped to 82 percent, the lowest level in a year.

Anthony Stanley