Enter multiple symbols separated by commas

Trading Oil in the Wake of Sandy

Editor's Note: Due to Hurricane Sandy, there will be no "Futures Now" show on Tuesday, Oct. 30.

East Coast Takes a Beating as Sandy Nears Landfall
Getty Images

The "Perfect Storm" is pushing the price of crude over the edge.

Crude oiltraded slightly higher Tuesday, with a weaker U.S. dollar relieving demand concerns, and an oversupply caused by Hurricane Sandy. The energy floor at the New York Mercantile Exchange will remained closed for a second-straight session on Tuesday because of Hurricane Sandy, the first two-day weather-related shutdown of the markets since 1888. In turn, volumes will likely be much lighter than usual.

(Read More: How the Decision to Close Wall Street Came About.)

I will continue to look for resistance building against $86.50, as yesterday's high was $86.43. It will be important for oil traders to look for any definitive answer on when refineries could intend to turn back to full production capacity. With a weaker dollar that has seen the U.S. Dollar Index struggle around $80.30, a close back below $80 will help commodity prices ahead of Chinese manufacturing data Wednesday evening. Also, as the storm makes bets on oil less measured as to risk, if oil cannot close below $84.94, it may cause short covering today.

(Read More: Oil Markets Brace for 'Demand Destruction' After Sandy.)

So how am I looking to trade oil right now?

Upon a close below these levels I will be looking to add to short positions, with the next major support level coming in at $82.16. Only a close back above $88 will put this market back into neutral-to-bullish territory.

Read on for 10 Things You Need to Know to Trade Futures

Watch "Futures Now" Tuesdays & Thursdays 1p ET exclusively on FuturesNow.CNBC.com!

Like us on Facebook!

Follow us on Twitter! @CNBCFutures

Questions? Comments? FuturesNow@CNBC.com

Contact Blog

  • Showtimes

    Watch Futures Now Tuesdays & Thursdays 1p ET exclusively on cnbc.com!

Sponsor Links

  • CME Group brings buyers and sellers together through its CME Globex electronic trading platform and trading facilities in New York and Chicago.

  • Take your trading to the next level with a platform that lets you trade stocks, options, futures and forex all in one place with no platform or data with no trade minimums. Open an account with TD Ameritrade and get up to $600 cash.