Traders Make Money as Oil Prices Go Nowhere… WSJ

September 17, 2017 by Jim Colburn Leave a Comment

From Stephanie Chang, WSJ:

“Many traders are adapting by pursuing what is known on Wall Street as a mean-reverting strategy, generally one that wagers prices will fall when oil is above a certain level and rise when it declines below a threshold.”

There is always a “however”:

“Even practitioners of the mean-reversion trade warn that it can be hazardous. Such trades typically make up a small portion of Mr. van Essen’s fund activity, he said, but his use of it has increased to more than 50% over the past year.

“I don’t think it’s going to last” more than another year, said Mr. van Essen. “Commodities are changing and you have to adapt.””

Commodity Research Group (CRG), founded by veteran analyst Edward Meir, is an independent research consultancy specializing in base and precious metals, as well energy products. The Group provides research and general price analysis for these markets, along with advice to companies seeking to construct commodity hedging strategies.

Our associates bring decades of experience to the table, as they seek to help our clients understand the markets. CRG will distill the myriad of pricing variables mentioned above into coherent research that is to-the-point and tailored to a clients hedging or pricing needs. In addition, CRG is available for consulting assignments and speaking engagements. CRG does not manage money or trade for itself.

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