Commodities

For the last few weeks oil (light crude) is running between $77-$80 which gives nice setup for trading. I’ve played several time in this range and it worked quite well.

Yesterday I had an order to buy the black gold at $77. I woke up in the morning to see that I am in.
By 10:00 I was 50 points up so I moved my stop loss to 77.02. I was stopped out.
I was upset to see it up again to 77.50 and I put another order to buy it at 77. Soon I was in again but this time I was caching a falling knife. Before I knew it the oil was at 76. Few minutes after it was 75.55 my stop loss was at 75.40 and it seems very close.

It recovered a bit back to 76.10 just to go back to 75.80. Today it was the same story. Recover a bit to 76.20 just to move back to 75.80.
I was waiting for the US inventory data praying that I won’t stopped out. Minute before 15:30 the contract touched 75.49 and I though that I need a really good data to bail me out.

The data was a bit better than expected so the oil recovered. First to 76 and then to 77. Using the Euro gain against the Dollar the oil rose to 78 and I closed my position. What a roller coaster!

What I’ve learned from that? to use my brain more. It is good point to buy at 77 but first let it fall below then I should buy it on the way back. Lesson learnt.

After the big fall of the British banks, the oil companies have much more influence on the FTSE 100. This means that the $ against the £ and oil prices set the tone on the index.

Today the oil jumped 9% and the GBP/USD is 1.41 if the oil and the $ can keep this level I would say that the FTSE 100 can go back to 4000 mark very quickly. And in my opinion the oil price on the long run will go up. After all as far as I know it is the most needed commodity and although the green revolution there isn’t any decent substitute to the black oil. So perhaps the FTSE 100 is not all gloom and doom after all.

Hi All,

I bought yesterday the oil company Dana Petroleum. I know that oil prices are down, but this company states that they will still earn even when the oil price is $30 (which is now around $38). On top of that the company is debt free which is always a good positive sign.

They announced on Monday that they bought Bow Valley Energy for $177m in cash.

I bought them at 947p (March rolling) using Paddypower that offered the best spread by far.

At the moment the price for Oil light crude (Feb) is $37.8 if it touches the 35.5 I am in! Buying of course…