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Two Ways To Play: Crude Oil Inventories Expected to Decline


Strengthen your portfolio in good times and bad.

Crude Oil

Crude oil is little changed this morning ahead of the weekly crude inventories report but it's set to end 2009 with its biggest annual gain in over a decade. According to Bloomberg, analysts are expecting inventories fell by 1.85 million barrels last week. Further, tensions from Iran, the world's second largest holder of reserves, is also helping to keep a bid under oil. Crude fell last year by over 50%, its largest decline since futures started trading in New York. It's set to end this year up over 75%.

From the Bull Pen: Looking out into 2010, if you think the weaker dollar will also be another catalysts for crude oil plays, consider Transocean (RIG). In the short term, a sell stop can be set below the recent low ($80).

From the Bear Cave: If you're bearish on crude oil, consider the oil ETF, (USO). One option is to wait for the extra volatility to fade after the weekly oil numbers at 10:30 a.m. EST. And watch the behavior of this ETF which is currently sitting at its 50 DMA (38.80). Consider downside entry should it fail at that level, and remember to set a buy stop to limit your losses.

For more ways to play and other trading ideas from more than 30 top market pros, take a free trial to our Buzz & Banter.

A Quick Check Around the World

Asian trading closed with the Nikkei -0.86%, India -0.33%, Hang Seng -0.01%, Shanghai 1.58%, and Taiwan 0.73%.

Across the pond, we see the FTSE -0.51%, CAC -0.67%, and DAX -0.83%

As of 8:15 AM EST, S&P Futures are trading -5.00 to 1116.75. NASDAQ futures are -6.00 to 1866.25.

A Look at Commodities

Over in commodities, crude oil is -0.06 to 78.82 while gold is -3.30 to 1094.80 this morning. Silver is -0.085 to 17.025 and copper +0.0305 to 3.3440.

The dollar Index is +0.105 to 78.290.

On the Radar


09:45 Chicago PMI 55.1 cons.
10:30 Crude Inventories

Click here for the full trading radar.

Good luck today!
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No positions in stocks mentioned.

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