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Volatility Equals Opportunity

Oil Volatility

As markets plunged on that fateful Monday in August, the price of crude oil made a new 6 1/2 year low as it traded down to $37.75 on the active month October NYMEX futures contract. NYMEX crude oil has been in a bear market since June 2014 when it traded at highs of over $107 per barrel. Increasing production from the US, Russia, and OPEC resulted in a supply glut and prices plunged.

In early March, many analysts were calling for oil prices to hit the $30s, $20s, or lower as crude fell to lows of $42.03. Moreover, as many equity indices traded on US markets contain companies in the oil patch, the bear market in oil contributed to the slide in stock prices. Then a funny thing happened on the way to those lower prices: the price proceeded to rally for nine straight weeks and recovered to over $60 per barrel, an increase of over 49%. In July, the price began its decent once again, culminating in the lows on August 24.

OPEC gift

Certain statements in this blog post may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release and other potential future plans and objectives of the company, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statement.


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