The WTI Crude Oil markets as you can see did very little during the session on Friday, we essentially went back and forth all day, and settled at a virtually unchanged session. That being the case, it appears to me that this market is starting to slow down a bit, which of course makes sense as we are approaching the top of the consolidation area. At this time of year, it's going to be difficult to breakout simply because the real money isn't in the market right now. Most of the people trading are amateurs at best, and simply do not have the wherewithal to push the market the way it needs to be pushed.
The Federal Reserve will control this market going forward though, as the world tries to focus on whether or not they are going to taper off of quantitative easing. This is something I get sick of saying over and over, but unfortunately it is definitely true. After all, this will greatly affect the value the US dollar, which of course is the medium of exchange for getting oil. As long as that's the case, the Federal Reserve has a large hand in determining the price of oil, regardless of the situation.
Range bound until the end of summer?
Obviously anything can happen, and a headline can cross the wires that sets the market into a fit. However, at this point in time I have to say that I believe this market will remain range bound through the next couple of weeks. After all, there probably won't be much to make a move in one direction or the other, unless of course somebody and the Federal Reserve comes out and says something.
That being the case, I actually prefer to sell calls above the $109 level, and puts below the $103 level, assuming that you can get decent premiums for them. Essentially it is what is known as a "strangle", which means that you need prices to stay within the range. Between now and any official announcements, I just don't see any reason why this market going to go anywhere.