Crude oil futures are not for the faint of heart. In April 2020, the nearby NYMEX futures dropped below zero for the first time since trading began in 1983, reaching negative $40.32 per barrel as there was nowhere to store the energy commodity. Less than two years later, in March 2022, the nearby price rose over $170 to a $130.50 high, the highest price since the 2008 $147.27 record high. In a May 28 Barchart article on crude oil, I wrote:
Discipline is crucial when positioning in crude oil. While I favor a long approach to crude oil at the current price levels, a break below the late 2023 lows could ignite a speculative plunge. Conversely, a rally that takes the energy commodity above the September 2023 highs could result in an explosive move to the upside. Crude oil could be near a significant bottom, but any risk position requires careful attention to risk-reward dynamics.
