The Truth Behind Oil’s Recent Price Spike

by | published March 22nd, 2018

For the past week here in Oil & Energy Investor, I’ve been discussing some of the broader – and more technical – factors in the oil trade.

But my overall conclusion in each of those issues was this…

A rise in crude oil prices was coming, at least in the near-term.

A conclusion that has certainly come true.

As I’m writing this, the West Texas Intermediate (WTI) has surged almost 3% for the day, over 5% since the close on Monday, and is up 6.5% in a week – their highest levels since the beginning of February.

Meanwhile, Brent has registered equivalent gains of 2.9%, 4.6%, and 6.5%, respectively.

Now, there are two essential reasons why the price improvement is taking place, and both bode quite well for investment returns in the sector.

Revisiting the “Oil Vega”

by | published March 20th, 2018

A few years ago, in one of my books (The Vega Factor), I coined a phrase to explain the new way in which oil pricing was unfolding, along with the uncertainty resulting from it.

Then, the market was facing rising crude topping $100 a barrel.

Now, the situation finds oil rising into the mid-$60s after a bout of abnormally low prices.

The phenomenon described, however, applies to oil moving in either direction.

I called it “Oil Vega.”

Simply put, it refers to the increasing inability to determine the true value of crude oil based on its market price. 

Now, there is a reason why I’m revisiting this phrase here in Oil & Energy Investor.

You see, I am on close to putting the finishing touch on a new investment tool that identifies stocks based on this phenomenon.

And today, I want to give you a sneak peek at one of its main components…

Decoding the “Oil Vega”

Before we begin, I want to explain a little more about the origins of the term Oil Vega.