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Trading Oil Stock In A Sea Of Volatility

The price of oil continues its wild ride with a 7% increase one day smothered by an 8% decline in WTI the next only to rebound 5% on the following day. Wild swings are the norm. Pundits are all over the map on the outlook with projections running from below $40 to the $200 per barrel range as the market digests uncertainty with a bit of indigestion and apparently no Tums.

Traders are being whipsawed and fortunes spilled as the forces of supply and demand are muddled by the intervention of hedge funds; speculators; producers hedging cash flows; and, consumers and industries deciding what vehicle to drive or what fuel to burn in their generating stations or factories.

The fear side of the equation posits that there is a massive glut that will only grow despite industry reductions in capital expenditures and plunging rig counts as wells drilled in past… Read More …