Oil Reverses Trend

Saturday, October 10, 2009

Crude oil prices recovered Tuesday, after falling to their lowest level in more than a month, amid volatility on the last day of trading for the current active contract.

U.S. crude for February delivery ended the day in the black, rising $2.23, or 6.1%, to $38.74 a barrel in New York.

Prices recovered after plummeting by as much as 10% to $32.70 earlier, the lowest level for crude since Dec. 19, as the dollar soared against the pound and euro on continued European economic turbulence.

Tuesday is the final day of trading for the February contract. Oil for March delivery, which begins its front-month run Wednesday, settled down $1.73, or 4.1%, to $40.84 a barrel. The price of the February contract rose as the difference between the two contracts equalized.

Contango has diminished violently and the rise in oil prices has began. I bet on a long term trend change here.

When trading oil futures or ETF`s like USO look for the lowest comissions. Low round trip comissions are key to profitable trading.

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