Saturday, May 06, 2006

Make Money from Crude Oil

By now everyone is aware of the increase in the price of fuel. The price we pay at the gas pump seems to get more and more press coverage. That is because this is considered an extreme situation. Successful traders look for extreme situations. It’s a setup for a very profitable situation.


There are a number of ways to take advantage of this opportunity. The way I suggest is to look at crude oil. Fuel is made from crude oil. On the commodity exchange (a place where commodities are bought and sold) every ten cents (dime) in the price change of crude oil equals $100. Why every 10 cent move in the price of crude oil equates to $100 deserves more of an explanation than I have room in this article.


Recently the price of crude oil changed $1.14 in one day. What that means is if the price changed $1.14 that equated to a profit potential of $1,140 in one day. You could have made that amount of money while you continued to go about your daily life. How would making $1000 a day change your life?


Now let’s talk about timing and why I love weather forecasts. Natural disasters happen. I don’t want them to happen but they happen. So you may as well turn lemons into lemonade. Here’s what I mean, if a hurricane is headed for the Gulf Coast that means that crude oil will probably rise in price. Smart traders know this and they position themselves to profit from the rising price of crude oil.