Early Wednesday morning, the American Petroleum Institute (API) reported that crude inventories dropped 2.4 million barrels during the past week. According to Platt's, inventories were expected to increase by 2.2 million barrels.

The report also showed that there was an increase in gasoline inventories, with distillates dropping. While the Energy Department is going to report its weekly supply data later Wednesday, crude futures inched higher above $76 per barrel.

Continental Airlines (CAL - option chain) shares are rising today along with most other airline stocks as crude oil futures are showing bearish indicators for the first time in two weeks. The front-month crude oil contract is down about 1% today and has fallen below its recent trading range. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CAL.

CAL opened this morning at $20.42. So far today the stock has hit a low of $20.37 and a high of $21.47. As of 11:45, CAL is trading at $21.21 up $1.00 (5.0%). The chart for CAL looks bullish and S&P gives CAL a its highest 5 STARS (out of 5) strong buy ranking.

BP (NYSE: BP) closed at $67.38 Tuesday.

WTI Crude futures are recently up 0.11% to $101 according to Bloomberg.

BP is a holding company operating through three business segments; Exploration and Production, Refining and Marketing and Gas & Power and Renewable.

BP overall option implied volatility of 27 is near its 26-week average according to Track Data, suggesting non-directional price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Halliburton Company (NYSE: HAL) has moved higher over the past month as oil prices have been climbing steadily higher since August 23. HAL shares are on the rise again today as crude oil futures are up about 0.6% on the day. If you think the stock won't drop by too much in the coming months, then now could be a good time to look at a bullish hedged trade on HAL.

After hitting a one-year high of $38.29 in July, the stock has dropped and bounced back sharply over the past two months. HAL opened this morning at $36.47. So far today the stock has hit a low of $35.70 and a high of $36.47. As of 10:50, HAL is trading at $36.32, up $0.49 (1.4%). The chart for HAL looks bearish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider a January bull-put credit spread below the $30 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverages nice returns. For this particular trade, we will make an 8.7% return in less than 5 months as long as HAL is above $30 at January expiration. Halliburton would have to fall by more than 17% before we would start to lose money.

Exxon Mobil Corp. (NYSE: XOM) opened at $84.15. So far today the stock has hit a low of $84.05 and a high of $84.99. As of 10:40, XOM is trading at $84.83, up $1.23 (1.5%).

Following a three-month climb, XOM hit a 52-week high of $86.58 earlier this month. The stock is climbing gently today as crude oil futures inch higher. Recent technical indicators for XOM have been bullish but deteriorating, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $75 range. XOM hasn't been below $75 since March has shown support around $82 recently. This trade could be risky if crude prices slide, but even if that happens, it looks like this stock could find support just below $80, as well as from its 200 day moving average, which is currently at $75 and rising.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: At publication time, Brent neither owns nor controls a position in XOM.