Jonathan Rose, a veteran trader, is highlighting two critical indicators for assessing oil market volatility. He notes that these signals can guide investors on potential profitable opportunities in oil and refinery stocks, especially given recent geopolitical tensions. Previously, these indicators helped him identify a refining trade that yielded an 80% return within a week. The current state of oil markets shows expanding crack spreads and backwardation in futures, which both signal market conditions conducive to refinery profitability.
Recent developments have further intensified these signals, including the UAE’s exit from OPEC and ongoing tensions around the Strait of Hormuz, through which 20% of the world’s oil supply is transported. The price of West Texas Intermediate crude has risen from $66 to over $100 per barrel in just three months, while Brent surged from $71 to $119 during the same period, indicating heightened market stress.
With the crack spread expanding and futures in backwardation, refinery stocks are positioned for significant upside potential. Rose will elaborate on these strategies during a free online event, the Convergence Summit, hosted with Marc Chaikin on May 28 at 8 p.m. Eastern.
5 Stocks Our Experts Predict Could Double In the Next Year
By submitting your email, you'll also get a free pivot & flow membership. A free daily market overview. You can unsubscribe at any time.
