For five out of the last six trading sessions, crude oil has traded higher. As of this post April futures are $4 off their lows from last week. Prices are currently above their 18 day MA; identified by the dark blue line on the chart above. Some of my more aggressive clients have bullish exposure a few months out. My favored play currently is to be long futures while simultaneously selling out of the money calls 1:1. This leg higher in April futures is capable of lifting prices back above $95/barrel in my opinion.
Looking at outside market influence RBOB and heating oil may have turned a corner and it appears RISK is back on. Throw into the mix that the US dollar is exhibiting signs of an interim top. After the 5% appreciation in the last month we may see some back and fill on the greenback. I think this could further throw fuel on the fire, no pun intended.
Embrace the fact that we will likely be paying higher energy prices moving forward. I myself am dreading a lunch today that is 50 miles from my office today. Driving my SUV that gets roughly 12 miles per gallon I figure even if I choose not to indulge on the food which is higher because of rising commodity prices. You figure 100 miles door to door at $4/gallon were talking $35 in fuel. Of course there is not inflation excluding food and energy but a lunch meeting that would?ve cost me $50-75 5 years ago tips the scale closer to $150 today all in.