Oil and gas stocks are on the rise, according to recent data. One of the biggest reasons for this is the fact that the price of crude oil has finally begun to go up. The fact that this is gaining traction in the stock market is encouraging for those that trade the commodity because of the fact that this means trader sentiment is finally beginning to shift toward a more bullish stance on crude.
Last week, Exxon Mobil (XOM) reported its worst quarterly earnings number since 1999. However, over the last three months, the price of Exxon Mobil has gone up by more than $10 per share. Much of this action is thanks to the fact that crude has found some stability. The price per barrel now stands at over $46, which is a huge increase from its low of well under $40 a few months ago. Analysts now seem to agree that in 52 weeks, oil will rise up to about $52 per barrel. Just a couple months ago, analysts thought that oil would either be close to $40 or below.
Keep in mind, though, that even though Exxon’s revenue was the worst it’s seen in over a decade, their earnings per share number beat estimates. Thanks to this, the company has seen some big gains, and a rising cost per barrel is likely to keep pushing that forward. A long term position in XOM is looking more attractive than it has in a very long time right now, as long as you act quickly on this information. Before you buy, or take out any sort of call binary option, remember that analysts had very grim expectations of Exxon when those price targets were set thanks to a poor performing oil. Much has changed fundamentally with crude since then, and although this currently benefits Exxon, and other oil companies for that matter, a great deal, they are still at the mercy of the commodity that they specialize in. It is a precarious spot to be, but the long term outlook for crude does look promising at this point.
Trading oil is largely inaccessible to most, even though crude is the world’s most heavily traded commodity. Buying and selling futures contracts is just way too expensive, and way too risky for most people, but by focusing on binary options trading, you can easily access profits off of the price movement on oil. Because oil shifts so little on a daily basis compared to other assets, this is actually far more beneficial to small scale traders simply because they can make large profits with little risk or exposure. And thanks to the versatility of binary options, you can profit regardless of which direction the price is moving. Just pay attention to the news, the companies and countries involved in oil production and transportation, and form a larger strategy based upon that news. Then, fine tune each trade with an eye on the technical indicators that your data supplies you with. Oil has a lot of potential for small scale traders, but you need to approach it right if you want to hope to be profitable doing so.
When you trade oil short term, following the news is very important. Pay attention to what is going on in major OPEC countries like Saudi Arabia, look at what is happening as far as production and processing, and look at major companies like Exxon and Chevron. Breaking news can influence prices strongly, so even though the trend has now moved to a bullish one, make sure that short term fluctuations are not impacting your trading profitability.