Traders' take on oil prices

Does it feel like it costs an arm and a leg to fill your car these days? While consumers may continue to feel the bite from higher gasoline prices, investors can use these rising prices to their advantage. Beginning in March, crude oil has a seasonal wind at its back. For nearly 30 years, the third month of the year has been the best month for crude oil. As you can see in the chart below, over the past 5-, 15- and 30-year cycles, West Texas Intermediate crude oil prices head higher in March, and have generally continued to climb through September.

Does it feel like it costs an arm and a leg to fill your car these days? While consumers may continue to feel the bite from higher gasoline prices, investors can use these rising prices to their advantage. Beginning in March, crude oil has a seasonal wind at its back. For nearly 30 years, the third month of the year has been the best month for crude oil. As you can see in the chart below, over the past 5-, 15- and 30-year cycles, West Texas Intermediate crude oil prices head higher in March, and have generally continued to climb through September.

As the AAA chart below shows, the gasoline price is now higher than it was a year ago, and has been for the past two weeks, which also automatically means it is the highest it has even been in history (naturally, the implications of this record high gasoline tax on the cash-strapped US consumer are painfully clear).

NEW YORK — After almost three years of churning bumper profits from the massive price gap between the world’s two most actively traded crude oil contracts, traders, refiners, railways and investors are all asking the same question: Is the game finally coming to a close? The near US$20 premium North Sea Brent held for much of 2012 over U.S. benchmark West Texas Intermediate (WTI) has fallen to less than US$8 a barrel, the lowest since the crude-by-rail boom began to gather steam in early 2011.

Oil traders should not lose too much sleep worrying about what OPEC, often unpredictable and quarrelsome in the past, will do when it meets next week. The producer cartel, say delegates who attend meetings, is odds on to leave output policy unchanged. As a risk factor for oil markets, its May 31 gathering in Vienna barely features on traders’ radar.

The Federal Trade Commission weighed into the intensifying debate in Washington about oil-market speculation, saying supply-and-demand forces drive gasoline prices, not speculative oil traders.

The Federal Trade Commission weighed into the intensifying debate in Washington about oil-market speculation, saying supply-and-demand forces drive gasoline prices, not speculative oil traders.

In our dynamic, highly competitive ever shifting economy the best thing to do is be a large legacy firm in the natural resource extraction business: