Crude oil prices today were off by nearly 5% to $90.80 in mid-day trading as news that the United States plans to release 30 million barrels from the Strategic Petroleum Reserve to offset supply disruptions in Libya pushed prices sharply lower. In addition to the U.S. release, the International Energy Agency announced plans to release another 30 million barrels between the remaining 28 member nations. The increased supply entering the market combined with a weaker U.S. economic picture which has the potential to soften demand seems to be more than enough to send traders scurrying for the exits.

It appears that policymakers in the United States and several major petroleum producing countries have set a price target somewhere in the $80-$85 per barrel range. While some have been quick to suggest that the sudden push for lower oil prices is politically motivated, a slowing global economic recovery is making it easy to build worldwide support for the policy.

For the time being, the current economic environment does favor lower prices; at least in the short-term. NYMEX Crude sliced through the 200 day moving average today for the first time in six months. A close below this level will likely trigger additional institutional selling adding additional pressure on prices over the next few days.

Traders looking to capitalize on the ideal combination of policy change and trend reversal may want to consider entering a short position here with a stop placed just above the 200 day moving average. Short term traders could look for a price target of somewhere between $80 and $85 per barrel as some additional follow-through to the downside can be expected.

As always, the futures trading markets can be volatile so scaling any trade to an appropriate level of risk is essential to being profitable in commodities. Trading crude oil futures is recommended for experienced traders only. Casual investors are encouraged to look into related exchange traded funds or stocks as a portion of a diversified portfolio of holdings.

There are some excellent dividend-paying stocks out there to choose from (some yielding close to 5% annually) including Exxon Mobil Corporation (XOM), Conoco Phillips (COP), and Chevron (CVX). Dips in the market can be good opportunities to accumulate shares as dividend yields rise. This represents a less risky strategy than futures trading for longer-term investors.

The current pullback does bode well for consumers who should start to see additional relief at the gas pump beginning as early as next week. In many areas where gas prices had reached over $4 per gallon earlier this year, $3 per gallon fuel is likely to seem like a bargain.