Energy Prices Recovering

On March 5, 2012 by TradingDesk

Energy prices are recovering this morning, after Friday’s furious sell-off which wiped out the 7-9 cent gains we had on Thursday. Technical studies are moving into neutral territory after remaining firmly in bullish favor over the past two months. Upward slanting trend lines are holding at the moment for both RBOB and HO however, so it’s too early to say that the 2012 spring rally has ended, in fact this would mark the earliest peak in gasoline prices in 30 years if we have topped out.

Global stock markets are largely in the red this morning after China cut its growth forecast by more than 1%, which disappointed many who’s forecasts rely on the unending emerging market growth. European headlines continue to worry investors, with a contraction in PMI readings, rumors of a new Irish bailout and a Greek default giving buyer’s pause.

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Bulls Still In Control, But Signs of Being Overbought Remain

On March 2, 2012 by TradingDesk

It was a wild Thursday for energy prices, as technical momentum from Wednesday’s late rally was coupled with a rally in stocks that pushed contracts a nickel higher, only to see prices skyrocket after reports that a Saudi oil pipeline had exploded. WTI Crude spiked over $110, and Brent broke $128 before the Saudi’s released a statement denying the explosion. Gasoline prices were up 13 cents at their peak for the day. Although the event may turn out to be a non-issue, it did clearly show that the market is extremely sensitive to any supply shocks.

We are seeing some relatively modest selling today, largely driven by a plunging Euro as a host of new stories raise more questions about their financial system. Technically the bulls are still control of the action, but signs of being overbought remain. Energy Prices have correlated very strongly to stock prices over the past several years, and with the DJIA index having crossed 1300 more than 70 times in the past week and now trading below that level, it suggests that the energy markets may have to find their own direction for a while.

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Gold down, bulls still control energy prices

On March 1, 2012 by TradingDesk

Yesterday was a busy day for market moving headlines, with the highlight being FED Chairman Ben Bernanke throwing a wet blanket on financial markets by suggesting that QE3 wasn’t coming in his testimony before congress. Commodity and stock markets sold off sharply, with Silver and Gold making the most dramatic moves, down 7% and 5% respectively.

Energy commodities fared much better, bouncing off technical support levels midday and making a furious rally in the last 10 minutes of trade to make a clear point that bulls aren’t yet ready to give up control of fuel prices.

It’s another busy day for news, with weekly jobless claims unchanged at 351,000, consumer spending for January was unchanged for the 3rd consecutive month, and personal income and savings rates dipped slightly. The Bernank is testifying for a 2nd day as well, which will be watched closely for any sign that free money which has become the oxygen of financial markets since 2009, will be extended.

Today is the first day of trading for the low RVP RBOB contract, so don’t be scared by the 22 cent increase in futures prices. Looking forward, despite a nice selloff this week, we remain just 10-15 cents from our 2011 highs in refined products, and longer term technical studies continue to point higher.

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