With U.S. military action against Syria possibly coming within days, oil investors must ask themselves "Who wants to go home short crude into a three-day holiday weekend?" Since few will answer "me," I think it's a good bet that we drift higher into Friday's session.
Crude oil has traded more than $3 down from its $112.24 high, reaching a low of $108.60 in early Thursday trading. The market has undoubtedly softened, but the fact that the market closed above $109.01 was encouraging to the bull camp.
(Read more: Whew! Futures indicate that the oil spike won't last)
But the biggest factor is that we are heading into the long Labor Day weekend with Syria looming on every trader's mind. The reality is that no one wants to go home this weekend short crude, so traders are either long or flat, and we expect this attitude to help boost this market over the next 24 hours.
Crude consolidated between $108.40 and $109.30 on Tuesday's session, and the market has used this as a zone of support in early Thursday trading. Only a close below $107.85 to $107.95, will show a sign of failure. On the upside, look for a close above the psychological $110 level to help propel this market back up to the swing highs.
(Vote in our poll: Where will crude oil end the year?)
The bottom line is: If you want to play crude now, consider the October crude oil options.
If you are bullish, buy the October crude oil 120-strike calls for $530 each. This gives you 20 days of long exposure. Meanwhile, bears should buy the October crude oil 103-strike puts for $550 each, as this will give you 20 days of short exposure. Food for thought!