SECOND QUARTER PLAYBOOK: OIL

Crude ended the quarter up 17%, closing on Thursday at it's highest level since September 2008.

And pro energy trader Joe Terranova is convinced that for the next 3 months the path of least resistance in oil is higher.

Part of his call stems from the price action of crude during the same period over the last 5 years. Take a look:

Oil's Second Quarter Performance
2006     2007    2008    2009    2010     2011
+11%   +7%    +38%   +41%   -9.7%    ?

"Historically crude prices appreciate in the second quarter," he says. (Terranova thinks the only reason crude was weak in Q2 2010 was because of the uncertainty generated by the Gulf spill.)

Ontop of that, Terranova thinks technicals are also bullish oil. He's watching $106.95. “It’s the highest we’ve been for the past 30 months,” Terranova says.

And with upcoming elections in Nigeria providing more geo-political uncertainty, he thinks a breakout is entirely possible.