If you want big profits you need volatile trending markets and energy markets are just such a market.

Seasonal trends allow traders to better isolate high return, low risk trades and are easy to use and take advantage of and can increase your profit potential dramatically.

They are perfect for all traders, even those who have never traded energies before.

Here we will give you the key seasonal for each energy market and the golden rule for trading them. Lets have a look at the seasonal trends in crude its two by products unleaded gas and heating oil and finally natural gas.

Heating Oil

Distillation is the primary method of refining Crude Oil into Heating Oil. Heating oil, also known as No. 2 fuel oil, accounts for about 25% of the yield of a barrel of crude, the second largest "cut" after gasoline.

The demand for heating oil is strongest when the weather turns colder.

Thus stocks tend to be highest in the October and November and reach a minimum in the February - March time frame when demand comes to an end.

June and July represent the summer fill season in anticipation of the colder weather ahead.

Unleaded Gas

For over a decade, gasoline has been the largest petroleum product refined in the United States and the world. Gasoline is the largest single volume refined product sold in the United States and accounts for almost half of national oil consumption. It is a highly diverse market, with hundreds of wholesale distributors and thousands of retail outlets, often making it subject to intense competition and price volatility.

Three-quarters of the total usage of gasoline is by individuals, with demand ebbing and flowing with the driving habits.

The demand for gasoline is seasonal and is the reverse of heating oil, where peak demand is in the summer driving months. Thus, gasoline stocks peak in April May and trough in September October.

Crude Oil

As we have seen above the demand for heating oil and unleaded gas is seasonal and this influences the seasonal of crude oil as production is switched between the two to maximize refining capacity.

Crude oil has a strong seasonal tendency for prices to move higher into the autumn, as refineries switch production of gasoline to production of heating oil in mid to late summer. This often spurs demand for crude and results in higher prices.

Natural Gas

In the United States, natural gas is used primarily as a heating fuel in the Northern states during the winter months and is used as a fuel to produce electricity to power air conditioners during the summer in the Southern states.

Therefore, demand on a retail level will be highest during these periods and traders need to look at storage coming into these periods of peak demand to anticipate where prices will go. Trading Seasonal trends

Now we know the seasonal trends we need to look at the way to trade them the golden rule for trading seasonal trends is: Price precedes consumption

This is because in energy markets supply must be stockpiled to meet seasonal demand. This means:

That price tends to rally in anticipation of consumption and not necessarily once the excess usage has begun. KEEP THIS IN MIND most traders dont.

This is because in order to provide the excess supply to meet the heavy demand on the retail level, distributors must begin buying aggressively in advance of the actual retail demand season. Therefore, demand on the wholesale level begins to increase in advance of the peak usage seasons.

Learn the seasonal trades and get great profits with low risk Learn the seasonal tendencies in energies and trade them correctly and you could be making huge profits with low risk in one of the worlds most exciting and lucrative trading markets.

They are a great supporting factor for technical traders and fundamental traders alike and knowing the seasonal and acting on it can help you increase your odds of success and your profit potential.