Seasonal Trade Alert: Oil

Posted: Dec. 20, 2022, 5:55 p.m.

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Below is a chart of the March NYMEX WTI futures' 5, 15, and 30-year average price fluctuation.

We've listed 3 Ways to Play at the end of this write-up.  


Performance Snapshot

Below is a performance snapshot of the seasonal trend for each of the last 15 years.  You can find the average gain/loss, best/worst equity (based on one futures contract), and more. 

We've highlighted the two off-trend years in red.  


The Technical Landscape

Refiners in several large-producing states are subject to taxes on year-end inventories of crude oil and it's products. Refiners work to maintain their runs going into December on current stocks as much as possible. By mid month, their supplies are lowered, and the need to be replenished drives depressed prices higher into January. Mar 23' Crude Oil has held above a support level of $71.50 (sign of strength). The 21 Day Moving Average is currently $76.59, which if crossed, will confirm additional strength.


3 Ways to Play

Here are three ways to consider playing this bullish seasonal trend:

1Buy a call. For clients looking for a way to play this seasonal trend with limited risk, we see the value in the March 80 call that expires on February 15. Contact our trade desk if you want to place this trade or get more information: 312-278-0500.

2Buy a future(s) with a stop loss.  Deciding where to buy and where to place the stop will vary from trader to trader, as each has a different risk profile and risk tolerance.  

3Use more complex options strategies If you're curious about other ways to get exposure via different options strategies, contact our trade desk: 312-278-0500 or email [email protected]

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Futures trading involves substantial risk of loss and may not be suitable for all investors. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

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Seasonal Trade Alert

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