Is a Break of $3 Coming?

On August 8, 2012 by TradingDesk
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After trading briefly over $3 yesterday, RBOB and HO failed to settle over this key technical and psychological resistance level. Prices pulled back overnight on the heels of a dropping Euro, which reacted negatively to another drop in German manufacturing production, which shows that the drama playing out in the peripheral countries is having an impact on the continent’s largest economy.

Meanwhile, US Stocks continue their summer surge on light volume, nearing their highs for the year. With correlations remaining high between stock and energy prices, and fundamental data remaining sluggish, whether or not stocks can break to new highs will likely dictate where product prices go from here.

 CLICK HERE for a PDF of today’s chart

Dog Days of Summer Trading

On August 7, 2012 by TradingDesk
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The dog days of summer trading kicked off yesterday, with the lowest non-holiday volume of the year across many markets, as summer vacations and central-bank fatigue take hold. Stocks remain strong, with European shares leading the way today, which is helping to lift energy prices. If WTI can break $93 and hold, a run to $100 looks to be in the cards over the next week or two. Likewise, products appear poised to run higher if they can get back above the $3 range.

A large fire hit Chevron’s 245mb/d refinery in Richmond California today, which will likely be a headline to help boost prices today, and could have a dramatic impact on cash values on the west coast, while other physical markets will have little to no effect given its location.

CLICK HERE for a PDF of today’s chart

Stocks and Refined Products Poised For A Few Days Rally

On August 6, 2012 by TradingDesk
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Energy prices are slipping this morning, giving back some of Friday’s huge gains, as rumors of Russian interaction in Syria – widely floated last week – have not materialized, and as the two named tropical storms no longer appear to be a threat to the US. Saudi Arabia also surprised markets this morning, by lowering its price for September loading by more than anticipated, again demonstrating that supply is ample globally.

Stocks are holding in the green after their own furious rally Friday, which is helping to limit the commodity selling so far. News that the ECB has changed lending requirements to bail out Greece again has given the Euro a boost which is helping to add to the bullish sentiment. Technically, stocks are breaking out and appear poised to move higher for the next few days, which should help refined products continue on in their seasonal rally.

CLICK HERE for a PDF of this morning’s charts

 

 

Over 40% of US Refining Capacity In Tropical Storm Path

On August 4, 2012 by TradingDesk
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The latest forecast models are putting tropical storm Ernesto in the Gulf of Mexico by this Thursday, with tropical storm Florence picking up steam in the Atlantic.  While You may be wondering why we make such a big deal about potential hurricanes forming in the gulf coast (especially with the drought in the central plains). The simple reason is that more than 40% of the country’s refining capacity is located in areas vulnerable to these storms. The attached chart shows what has happened to refinery production in the past when major hurricanes hit near the major refining centers between Houston and New Orleans

As you’ll see using the link below, the most recent mean of models for TS Ernesto puts this storm right in the middle of that zone.

CLICK HERE FOR A LIVE STORM TRACK VIEW

With refining disruptions come supply shortages and price surges. With a lower than average number of supply storm activity in the gulf over the past couple of years, statistically it’s only a matter of time until a major storm hits. A sound fuel supply strategy is to ensure a steady supply and hedge against price surges with a Price Risk Management program from TAC Energy.CLICK HERE for details on how to protect your fuel supply and business.

 

RBOB and Other Markets Recovering on Jobs/Tropical Storm

On August 3, 2012 by TradingDesk
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After the ECB’s inaction sent risk assets reeling Thursday, we are seeing a nice recovery this morning after the monthly Non-Farm Payroll report beat most forecasts, with 163,000 jobs created and no change in the rate of unemployment.

RBOB Prices got a boost yesterday as tropical storm Ernesto formed in the Caribbean. Although most forecast models now suggest the storm will hit the Yucatan peninsula next week, there is still a chance this system will make it into the Gulf of Mexico and threaten US refineries.

Technical studies are starting to show both RBOB and HO losing momentum after their strong July rallies, and without the hope of new stimulus for at least another month, it seems less likely that products will break out of their trading range without some sort of disruption to supply.

CLICK HERE for this morning’s Jobs Report

CLICK HERE for a PDF of this morning’s charts

 

RBOB and HO DROPPING AFTER US FEDERAL RESERVE AND MARIO DELAY ACTION

On August 2, 2012 by TradingDesk
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After the US Federal Reserve took no action yesterday, markets were clearly disappointed, but selling was minimal as hopes remained that the European Central Bank would act today. Stocks and Commodities across the globe were up before Mario began speaking, and while he made it clear that the ECB intends to act, the reality that there would be nothing done immediately has just sent shockwaves through the markets.

RBOB and HO prices have fallen 3.5 cents in the past 10 minutes, as stocks have dropped around 1 percent on the – lack of – news.

Yesterday’s DOE report showed that the US Export market remains capable of offsetting weak domestic demand, despite refineries running at high levels to take advantage of big cracking margins. Watch the $2.90 level as the next major hurdle to the upside, with support coming in lower on the charts in the mid $2.70s.

 CLICK HERE for a PDF of this morning’s charts

DOE Weekly Report

On August 1, 2012 by TradingDesk
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CLICK HERE for a PDF of this week’s report

All Eyes On The Fed Today

On August 1, 2012 by TradingDesk
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While July finished on a weaker note – with a mysteriously large sell order sending stocks sharply lower in the last minute of trading – it was the first time Since April 2010 that global Commodity, Equity & Bond indices all posted gains along with the US Dollar. The ominous nature of that otherwise positive statistic is that 6 days later was the famed “flash crash”.

All eyes are on the FED, and their policy announcement today, although yesterday’s action shows that hopes for a new stimulus package continue to fade. With the ECB and a handful of other global central banks meeting this week, expect for some wild swings as the headlines roll out.

Crude and Diesel markets are quiet again today, with WTI shrugging off an 11.6 Million Barrel draw in yesterday’s API report. RBOB continues its manic behavior, with nickel swings now the norm as more and more managed money flows in – and out – of the market. Technicals are stuck in neutral, so expect a choppy trading day with the DOE report and FED statement both working to set the tone.

CLICK HERE for a PDF of this morning’s charts

 

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