Oil Price Pattern

“If 2010 follows the pattern of the past 15 years,” notes Frank Holmes of U.S. Global Investors, “we are approaching the start of a seasonal climb in the price of crude oil that could present a good investment opportunity in energy-related stocks…

“As the 15-year chart above illustrates, much of the recent drop in the price of oil can be explained by commodity price weakness that typically occurs from October through December, and thus does not represent a cyclical downturn.

“These seasonal factors include a reduction in driving during the fall and more moderate temperatures between the summer cooling and winter heating seasons. During the 15-year period, January has typically been the month in which the seasonal oil price trend starts back up again as markets prepare for the summer driving season.

“It is interesting to note that, while crude oil prices are usually soft during this time of year, energy stocks begin to strengthen in December, offering nimble investors an opportunity to capitalize on favorable seasonal strength to come.”