Being Profitable With Commercial Crude Inventories


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By Darrell Martin

All over the world, it is well known that Americans love their cars. Cars need gas to run so Americans pay attention to the price that they pay at the pump. Commodity traders who trade oil pay attention to things like Weekly Petroleum Data, Crude Oil prices and how many million barrels per day on average refineries supplied.

US Commercial Crude Status Report

Each Wednesday, the US Energy Information Administration (EIA) releases its status report concerning the previous week. There were several agencies reporting on the inventories, stockpiles and supplies. When all was said and done, US commercial crude inventories had increased by 2.6 million barrels for the week ending August 14, 2015. It had maintained its inventory of 456.2 million barrels. These are levels that have not been seen for this time of year in at least the past 80 years!

Even though reports showed that total motor gasoline supply averaged 9.6 million barrels a day for the past four weeks, which was up by 6.5 percent compared with the same time last year, the price of crude oil dropped. It was at its lowest level in the last year at just under $42 a barrel.

What does this mean to you as both a trader and a consumer? As a consumer, you can hope for lower prices at the pump. As a trader you can hold on to any crude you may own in hopes of a better price.

Trading Crude

However, if you were trading Crude Oil in the Binary Option or Spread market when the huge inventory increase was announced, and you were prepared with your trade, you probably ended up a very happy trader!

Take a look at this oil chart. It shows how CL was having an unremarkable trading day until the news broke. Then, BAM! Down it went!

http://screencast.com/t/S5n06H96o

Profitable Trade

Darrell Martin watches for news opportunities like this one and shares it on his website on a news- trading calendar. Martin entered two Nadex spread trades. He bought the upper CL 43.00-46.00 with 10 ticks of risk. He sold the lower CL 38.00-43.00 with 45 ticks of risk. Both contracts had 2:30 PM EST expiration times. He set his take profit at 41.20 for the sold contract since the bought contract had very limited risk. http://screencast.com/t/pLPk9y6gUH

If the market was at 43 (center of the straddle) when this trade was entered and then dropped down to 41.20, which is the take profit setting, that would be a move of 1.8 or 180 ticks. After subtracting the cost of both spreads, 10 and 45, this trade resulted in a 125-tick profit for Martin. (180-10-45=125)

Paying attention to news, charts and other resources available to you can help you become the profitable trader you want to be. Using different charts can help you analyze your trade for entry and exit and for the placement of stops or take profit positions.

Americans will probably always have a fondness for cars. They continue to look for other ways to power them and other ways to get from point A to point B. Being aware of information shared through news reports can help you be better prepared for your trading day. Visit www.apexinvesting.com to use the news calendar that also lists strategies to trade along with the news events. Nadex is a US based exchange regulated by the CFTC and can be traded from 49 different countries.