One of the nice benefits of being an energy trader is not having to worry about the weather wiping out or increasing supply, (hurricane season not withstanding). Rain or shine, hot or cold, crude oil continues to be pumped. Gas and diesel yields are not dependent upon rainfall amounts. Refineries continue to produce regardless of weather conditions.
While the agricultural commodities have had wild price swings this year, crude has kept a very tight $13 trading range since May between $72 and $85. The reason is very balanced fundamentals of slow growth industrialized economies and high supply stocks for the bears, and for the bulls, weakening US dollar and strong growth economies of China and India.
We are now in a seasonally slow period for energy with the end of the driving season and another month away from heating season to kick into gear. This should help to dampen crude's latest run to the high end of the trading range.
With these ideas in mind, traders will do well to continue selling option strangle positions and enjoy the cash cow for at least one more month.
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