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Strategies & Market Trends : Dino's Bar & Grill

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To: Goose94 who wrote (10909)	1/1/2015 8:49:06 AM
From: Goose94	Read Replies (2) of 203764

All Eyes on Crude Oil The energy sector has captivated global attention in the last three months with the precipitous drop in oil prices. The standard used for pricing oil originates with the Brent crude. Light crude and Brent crude have similar fundamentals. Two seasonal spread patterns are setting up. Oil is heavily consumed in the wintertime because much of the global auto industry relies on diesel fuel. At the same time, as driving season picks up in the spring and summer months, refiners produce gasoline to accommodate the demand. One way to take advantage of this recurring pattern is by buying the June Brent crude while selling the July Brent crude, as a spread. The most optimum time for activating this strategy is January 10th through March 7th. During this time frame, this spread has performed successfully the last fourteen out of fifteen years. The alternative spread is buying July Brent crude and selling July crude oil, during the period from January 14th through February 1st. This spread has worked profitably the last twelve out of fifteen years. These maybe good opportunities in the market but there is still a risk of loss on both spreads.

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