The geopolitical crisis in the Middle East has been providing a boost for oil prices on speculative flows. The risk of a wider conflict could threaten the oil supply to the world and that has been the reason for sudden buyers to step into the oil market pushing prices higher. However, the seasonal bias for oil is tilted firmly lower.
Over the last 25 years, US soil has fallen over 60% of the time for an average fall of 6.91%. If we see oil, take further moves higher on any sad escalation of the conflict investors should remember this week’s seasonal pattern. Should the geopolitical crisis fade and a relative calm return to the region. Then one reaction to look out for would be a sudden drop in WTI oil prices.
Major Trade Risks:
The major trade risk here is if there is a greater escalation in the Middle East which would be likely to send oil prices higher.
Remember don’t just trade it, Seasonax it!