This Morning’s Energy Charts

On November 30, 2012 by TradingDesk
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This Morning’s Energy Market Charts

On November 29, 2012 by TradingDesk
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This morning’s market charts are available.

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Energy Markets Holding Onto Fractional Gains

On November 27, 2012 by TradingDesk
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Energy markets are holding onto fractional gains this morning, on very light volume as the holiday hangover seems to be continuing. Markets attempted to rally overnight, after the Greek debt can was kicked down the road for a third time, but those gains were erased with a sharp reversal in the EUR/USD which is now lower on the day. Durable goods orders in the US were unchanged in October, a relief to many who were worried about Sandy’s impact on large purchases, but the markets didn’t seem to care.

Like the rest of the financial indicators, technical studies for refined products are providing nothing in the way of clear direction, with most major indicators pointing in opposite directions. Prices do remain closer to upside resistance that downside support however, and if we are able to break through these levels, another rally can’t be ruled out. For the time being however, energy traders seem content to sit back and see how the Fiscal Cliff and Euro dramas play out.

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The Only Certainty Is Volatility

On November 26, 2012 by TradingDesk
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A fragile truce between Israel and Hamas has taken some of the supply-disruption buying out of the market over the past few days, but protests in Egypt have tempered the selling, as it reminds many of the Arab Spring of 2011, and the surge in oil prices it brought. Charts are turning it favor of the bulls, and typically we should see our seasonal lows on refined product prices sometime in the November/December time frame. If RBOB and HO are able to break through their November highs, just a few cents away from current levels, another 10-20 cent rally is likely, and suggests that the lows seen in the first week of the month will be the cheapest values we see this winter.

Meanwhile, uncertainty remains on the future of Greek debt, Spanish nationality and the US fiscal cliff, which should provide plenty of volatility as we enter the home stretch of 2012.

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DOE Weekly Report

On November 21, 2012 by TradingDesk
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Cease-Fire?

On November 21, 2012 by TradingDesk
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A cease-fire in Gaza was widely reported Tuesday morning, sending energy prices plummeting. As it turns out, there was no such agreement, and energy prices are right back where they were before the announcement, pushing towards their highest levels in a month. While the European drama continues to play out, it seems like the futures market is content to simply watch for the next move from the Middle East. I suppose we can be thankful that the only thing this latest war is affecting, for most of us, is the price of gas.

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Energy Prices Sent to Their Highest Levels in a Month

On November 20, 2012 by TradingDesk
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A surge in stock prices, a stronger EUR/USD and continued fighting in Gaza sent energy prices to their highest levels in a month Monday. European gasoil lead the move, gaining more than 4% after inventory at the Amsterdam/Rotterdam/Antwerp (ARA) hub dropped to their lowest levels in a year. Heating Oil rallied in sympathy, leading US futures with a 9 cent gain. The US diesel market remains stuck in a fundamental conundrum, with inventories at 5 year lows, but with refinery output at record highs, with 1 million + barrels/day of exports balancing the equation, but leaving US physical and financial markets subject to volatility across the pond.

A downgrade of French debt – Moody’s stripped the country of its increasingly-rare AAA rating – and talks of an Israeli ceasefire have done little to change the tone this morning, although minor pullbacks are happening across the board. RBOB remains the weak link, as the slow recovery of East Coast infrastructure continues.

The question of the week is if yesterday’s rally was just a correction of the past month’s sell-off, or the start of a new bull market. Seasonal factors suggest this is a correction, and lower prices are still ahead of us before year end. With the next layers of resistance another 8-10 cents above current levels however, there is still more room to the upside if stocks continue to rally and if Middle East tensions don’t cool.

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Energy Prices Surge

On November 19, 2012 by TradingDesk
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Energy prices are surging to start the week, supported by escalating violence in Gaza, and by a bounce in equities, which in the US are recovering from their lowest levels since June after optimistic statements from congress on the likelihood of avoiding the “Fiscal Cliff”. European Gasoil is leading the rally, currently up nearly 3%, doubling the gains of the other contracts, in what appears to be a technical breakout after 3 weeks of stagnation. HO is rallying in sympathy, while gasoline grades are lagging after the last 2 refineries shuttered by Sandy announced their plans to restart.

Both HO and RBOB are currently threatening their first layer of technical resistance, although speculative interest shrunk again in the past week, extending the longest drawdown in commodity bets by hedge funds in several years. If products can break above their November highs, there is a case to be made for a 20+ cent rally for each. If the buyers dry up however, an equal move to the downside should be expected.

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Indecision Reigns For Energy Prices

On November 16, 2012 by TradingDesk
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Energy prices remain stuck in the same stare down between Middle East tensions threatening a supply disruption, and economic concerns threatening another financial crisis. Equity futures are trying to rally on news that the White House is holding a meeting with 4 top congressional leaders to come up with a plan for the pending fiscal cliff. Now that technical support has broken down in US Stock indices, the pressure is increasing if the government is going to avoid a serious scolding from the markets for its inaction.

RBOB is trading above $2.70 for the 7th time in 8 days, but it hasn’t once been able to settle above that number. Conversely, HO traded has traded in the $2.95s 7 out of the past 8 days, but has bounced back higher every time. With technical studies in neutral, indecision is likely to reign until a major break in stocks, or a major development in the Middle East, is made.

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DOE Report 11/15/12

On November 15, 2012 by TradingDesk
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