The price of oil jumped up again, following the announcement that Saudi Arabia and Russia would begin working together to try and stabilize worldwide oil prices. The announcement came on Labor Day in the United States, and although the action on crude oil has begun to calm down, it is still standing over $44 per barrel as of the time of writing this. Energy stocks have also continued their upward push that began the previous week, using oil’s momentum to push toward higher gains. On Tuesday, Spetember 6th, the sector as a whole rose by 1.29 percent. More than a quarter of U.S. based companies in the sector rose by 2 percent or more.

The journey of oil over the last few years has been extraordinary. For outside observers, it has been quite exciting to watch, but not quite so much for those that were buying crude futures when prices were up over $100 per barrel. It has definitely been a rollercoaster ride over the past few years, and this recent announcement is yet another attempt at stability and growth. So far, it has been received positively, but it is still far too early to tell for certain. The next several months will tell us for certain.

For long term investors, it’s extremely hard to know what to do about oil. Back when crude was under $30, it was very easy to say that now was a good time to buy long term contracts on the commodity. Even binary options traders felt very comfortable taking out call options that didn’t expire until at least a week out in the future. However, the bottom of the market appears to be long gone, and timing your entry into oil is a lot more difficult now.

This difficulty exists for a number of reasons. Perhaps the biggest one for most people, is that the trading range of oil hasn’t been clearly defined. There has been oscillation, but it’s impossible to tell with a high degree of accuracy.

However, the difficulty right now is more of a mid-term one than anything else. Long term investors have an advantage because of the natural scarcity and current demand of the commodity. There is only so much oil that exists, and our society is so dependent upon it. Even as energy efficiency measures increase, there is still a huge need for oil for transportation and other energy needs. And there is only so much oil that exists on our planet. Over the next ten years, the most natural place for the price of oil to go is upward. Long term investors have two very strong factors on their side, and neither the scarcity issue nor the demand one are likely to go away. Short term traders, especially binary options traders focusing on 15 minute trades or less, can use momentum to their advantage, making binaries a safer place to trade than mid-term futures right now.

One thing that most financial news markets will not tell you is that this agreement may have political ramifications. Saudi Arabia and Russia are not exactly friendly countries, and there have been actions done by Saudi Arabia in the past that could be construed as economic warfare, especially when the Saudis were increasing their oil output and purposefully pushing the price of oil down thanks to increased supply. This came at a time when Russia was undergoing extreme economic difficulty, and it hurt their economy quite a bit. The country still has not fully recovered from this. Furthermore, Saudi Arabia has strong economic ties to the United States, and Russia is not even remotely close to the U.S. Whether or not difficulties because of this will push this level of cooperation away is something that only time can tell us.