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On Friday’s CNBC’s Options Action, the crew analyzed the performance of crude oil. After falling 19% in the last couple of weeks, it just managed to rebound 3% this past week off the lows. Fundamentally, rig counts are up slightly and both domestic and foreign demand for oil has not materialized. Any cut in production from OPEC will likely be countered by increase in production domestically. Moreover, energy companies have some of the highest debt levels of any sector, adding additional risks. Expecting oil prices it continue moving lower after this quick rebound, Michael Khouw suggested buying an Sept 67.5/60 Call Spread for a $2.30 Debit.

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