Over the past few weeks, you’ve seen me mention oil pricing “floors” more than once. Judging by your emails, many of you would like to know more.

So today, we’re going to delve deeper.

But first, let me restate the crucial point: establishing a floor in oil pricing (a price that oil won’t dip below) is what generates the ability to make money – for oil companies as well as for you as an investor.

So you’re better off ignoring the anxious talking heads on TV who are concerned about whether oil will break the $50 a barrel “ceiling” or not. Instead, what’s important is that oil is now unlikely to dip below $42. That’s the floor – and your signal that a stable pricing band has formed.

And that price floor will make you far more profits than the ceiling, wherever it might be.

That’s especially true today…

Oil Bounced Off its Ceiling – But the Floor is what’s Important

Crude oil prices are once again settling in the range that I’ve been predicting for some time: West Texas Intermediate (WTI), the benchmark rate for futures contracts in New York, having a ceiling price of $48 to $50 per barrel by mid-June.

As of close yesterday, WTI was at $48.16, while dated Brent (the other primary benchmark, set in London) was $48.85. Furthermore, the spread between the two – calculated as the difference between the two viewed as a percentage of WTI – has now come in below 1.5% for two sessions in a row, pointing toward the price once again approximating an actual market indicator.

WTI has now risen 83.7% and Brent 58.4% from their respective lows this year, both only three months ago on February 11. Now, as I’ve been predicting in several of my research services this week, oil’s current rise is just about over.

External factors have certainly contributed to the recent spike: spreading wildfires in Western Canada have combined with intensifying insurgent control of oil installations in Nigeria’s Niger Delta to offset apparent improvements in Libya’s ongoing civil war (the third main external element).