Crude oil is once again showing strength. So what's behind this sudden demand for the black gold?
First of all, we have seen some positive economic numbers come out of Washington. Second, seasonal factors are keeping many oil products in high demand, especially gasoline. If fact, gas demand has increased to more than 9 million barrels a day, a number that we have not seen since last summer.
With fracking becoming increasingly widespread, we are seeing less in the way of imports, and demand for West Texas Intermediate crude oil has increased. We have seen two straight weeks of 10 million barrel draws, something I have rarely seen as a trader on this floor.
To a lesser extent, continuing tensions in the Middle East are helping to elevate the oil prices. And as we were reminded by Tropical Storm Chantal this week, we are in hurricane season, and that has to be on everyone's radar.
(Read More: Two Big Reasons Gas Could Spike)
So how would I look to trade this market? It's simple: I want to buy dips and sell the high end of the range.
In terms of buying dips, I am looking to be a buyer at $104.20 and then $103.20.
As far as selling the high end of the range, I would look at $106.50 to $107.50. If oil trades through that area, we could see $110 very quickly.
However, I believe that for now, there is a real range to trade, just as we saw when we were trading in the $90s. The range has simply moved $10 higher, and the key now is simply identifying it.