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It looks like a great time to sell November call options on the NYMEX, at strike price of $90. Anytime oil is over $70 a barrel is a decent time to consider selling call options. When it closes at more than $75, look to sell call options at $90 or above, out one or two months. Even on Friday, Aug.3, a bearish day for oil, you could have gotten $560 for those November options, which expire Oct. 16. Even “experts” are puzzled at what is levitating oil prices. Supplies are abundant, and crude demand is hardly growing, and maybe is even shrinking. The developed nations of the world are, in fact, consuming less fossil oil every year. China is using more oil, and so are Mideast nations. The rest of the world is weaning itself off the black stuff, quickly now that the price is above $60. This “Peak Demand,” or transition to a post-fossil economy, does not mean we stop burning fossil oil. It means that each year we use less, rather than more. Incredibly, we are almost at that point now – despite media inattention that ranges between clueless and flatfooted. Few remember anymore that oil consumption fell 11 percent worldwide after the 1979 price spike, and did not recover for a full 10 years – when oil was cheap again. And nobody is reporting on another easily accessible fact: That global fossil oil demand rose by 3.1 percent in 2004, then 1.4 percent in 2005, then 0.7 percent in 2006. Do you see a trend there? All these figures are from BP’s website. Check it out. Still, the hedge funds are very active on the NYMEX, and even regulators ponder how many billions, or leveraged hundreds of billions of dollars, the hedgies have devoted to speculating on oil. There is at least $40 a fear in every barrel of oil – and hundreds of billions of dollars riding on that fear not going away. Still, I sense the bull-bear battle is reaching an ursine round this summer, somewhat like last summer. in the dog days last year, oil prices peaked at $78 a barrel, then fell all the way into the low $50s. We may see a repeat. Selling call options is not for the feint of heart. While a terrible string of luck has bedeviled oil producing nations – Iraq, Iran, Libya, Venezuela, Nigeria, Russia, and even Mexico are all deeply corrupt or unstable or both – things could get worse. Iran could get invaded, or loonies could take the crown in Saudi Arabia. But barring that, go make $560 a contract, for just pushing a few buttons at your online options brokerage.

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