Oil prices rallied early on Monday, September 26, going up to well over $45 before the trading day had ended in the United States. This comes after a dramatic drop during the previous week hurt the price of crude oil and the companies that are dependent upon crude. However, it’s clear now that consumer confidence has improved quite a bit over the last couple years in regards to crude because of this action. Oil dropped considerably the previous week, but as Monday’s rebound showed us, the previous drop did not trigger a whole new flood of sell offs, but was almost immediately rectified and the previous decrease in price is now just a minor blip on the radar screen of history.
One of the big reasons that oil recovered so thoroughly was because of the fact that some of the main oil forces gathered early on Monday to talk about what could be done to try and find a way to stabilize the struggling commodity. The meeting took place in Algeria before U.S. markets were even open, but the results were profound. Saudi Arabia and Iran have had very little luck over the past several months when it comes to price stabilization, and although the bottom appears to have come and gone, no real growth has occurred. Hopefully, this is now no longer the case. The International Energy Forum is going on until September 28th in Algeria, and during this time OPEC nations like those mentioned above were meeting on the sidelines. Iran especially has a lot of room for growth as they are still recovering production levels to where they were before 2012 when they were hit with sanctions.
Oil rose by about 4 percent over the course of the day, but this is coming after a roughly 5 percent drop over the previous week. One day’s worth of good news helped the stock to recover almost an entire week’s of bad, and that’s good news for those that have been on watch for signs of whether crude oil has obtained any sort of normalcy and abandoned the extreme volatility that we have seen over the last few years. It’s a small step, but one in a long series. Many experts believe that crude has bounced off of its bottom, and is now once again in a bull market. Long term futures contract might be out of your price and risk range right now, but this news—if it’s true, of course—does set the stage for a very successful run of call binary options, depending on the expiries that you will be focusing on and your entry points. Traders with experience should consider this trading method if they want to try and gain a foothold in this marketplace. Oil is the world’s most heavily traded commodity, and there is a ton of potential for creating profits if you approach it with skill and an eye toward risk management.
Exxon Mobil, who is undergoing an SEC investigation right now, did not get to see any of the benefits of this rise in prices. Their price fell by 0.47 percent on Monday, the equivalent of $0.39 per share. This happened even though the company had a big jump in price shortly after the market opened. After hitting a high of $84.50, the stock dropped down to $83.06 at closing. There was some oscillation along the way as a fair price was agreed upon, but even with oil doing better than it has in months, the company could not shake its potential legal fallout. This will be an interesting asset to watch, both for binary options traders and long term investors, as the company progresses over the next few months.