Energy Complex Volatility

On September 4, 2013 by TradingDesk
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The energy complex saw volatility all day yesterday as scatter-shot reports flew out of the congressional hearing to decide the fate about Syria. With Boehner, Kerry, and Obama trying to flush out additional support, whether congress will back a punitive strike still remains a shot in the dark. RBOB and ULSD showed a mixed settle at $-.0255/bbl and +$.0117/bbl, respectively. WTI and Brent crude blends saw modest gains with the majority of the action in the oil markets in 2014 Brent crude futures as Mexico announces that it will kick-off an oil hedging program starting next year. Equity markets remained volatile, precious metals posted gains, as all eyes remain on the middle east.

As the RBOB spec switched for NYMEX contracts, Group 3 and NYHB physical gas prices posted strong premiums for the day since pipeline prices remained relatively still. A gradual pull-back to their previous basis levels is expected. There are currently three different tropical invests that are crawling across the Atlantic ocean attempting to develop into something relevant. The most promising storm has a 50% chance to turn into a cycle in the next 5 days given the Lesser Antilles doesn’t break it up before it gets the chance.

Gas and diesel continue to trade at least a nickel away from any support or resistance levels with most technical indicators pointing to some more sideways movement.

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Market Update

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Energy Moving Sideways Fast

On September 3, 2013 by TradingDesk
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While trading sideways for most of the long weekend, the energy complex is mildly mixed this morning with the only Syria news being the White House plans on holding a congressional vote to decide if a US strike is necessary. After this news was released, WTI crude fell as low as $104.5/bbl in minutes and then shot back up to close at $107.36/bbl showing the situation is still being closely watched even over a holiday weekend. According to the CFTC, the spike in crude prices last week mostly belonged to a large spike in fresh long positions showing some new players are jumping in the market expecting higher prices.

New York and Group 3 physical gas prices show some life with 9-12 cent gains over RBOB as some markets switch to a higher RVP as summer comes to an end. For the most part, summer physical price volatility caught a break this year as the storm season is recorded as only the sixth season to not see a single hurricane formation this late in the summer. Although there remain no immediate threats in west Atlantic, storms are still sweeping to sea and will be closely watched.

After breaking through heavy resistance levels last week, RBOB and ULSD struggle to find technical direction and are given a large range to wander in. Major resistance levels still hold at the higher 2.90s for gas and lower 3.20s for ULSD. More sideways trading is expected if these remain untested.

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Market Update

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RBOB

WTI

BRENT

 

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