Uh-oh…you’ve probably noticed that gas prices are once again creeping higher, just in time for the driving season. As a motorist, it might have you cringing; but as an exchange traded fund investor, it might have you looking for an opening.

Gas has already crept up 5 cents a gallon, and it could go as high as $3 a gallon if those in the know are correct. Oil prices have also increased, to $82 on optimism about the economy, new tensions in oil-producing Nigeria and reports that China is building up its strategic reserves, reports Clifford Krauss for The New York Times.

Oil is entering a seasonally bullish period that generally lasts from March to August. Natural gas, on the other hand, tends to trade in the opposite pattern, being weak during those months and stronger during the winter. Other possible areas of interest to investors such as coal and alternatives such as solar, wind and nuclear don't exhibit the same strong seasonal trading patterns. All are affected by greater supply demand factors or government action and these can occasionally be more important than seasonal trends.

Light sweet crude (the champagne of oil) had already reached the $73 level by last June. The price just rose above $80 in the beginning of March. It has been stuck in a trading range from $70 to $83 for eight months, however. The usual fall/winter sell off did not take place this year and this indicates strong underlying fundamental support in the market. Supply coming from existing fields is declining rapidly and supply from new discoveries is not even remotely making up for the loss. Only the global recession that has lowered demand has prevented a major oil price spike from already occurring again. The technical patterns on the charts of oil ETFs DBO, USO, USL and the ETN OIL don't indicate that a sustainable rally is in the offing just yet. Investors need to watch for a break above $83 in the futures markets. The first attempt may fail with the price falling back into the range however. The second break above $83 is more likely to stick and offer a profitable trading opportunity.

Oil ETFs miserably fail at replicating the spot price of West Texas Intermediate (WTI) crude. If you’d like to learn why this is so, you may wish to review a well-written article that explains contango and backwardation.

However, my goal is far more basic. I only wish to help investors visualize just how far off the performance mark an Oil ETF can be.