Despite HO Surge and RBOB Drop, Energy Still Trading Within Range-Bound Patterns

On March 28, 2013 by TradingDesk

Heating Oil prices pushed through resistance Wednesday after the DOE report showed a large draw in stocks, apparently driven by strong exports off the US Gulf Coast. European diesel was also higher as cold weather across the pond boosted demand for heating oil. RBOB failed to hold its early break above resistance levels, and has dropped sharply this morning as a result. News that the Trainer PA refinery was back online after losing power Monday accelerated the selloff in the past hour. If the swings of the past 30 minutes are any indication, it could be an exciting day of trading, since the market is combining the last trading day of the first quarter with preparations for a long weekend. The most common reaction in energy markets is to move higher before long weekends, as many don’t like to be short in case some supply disruption takes place while they can’t trade. What will be interesting this time around is if the Euro-drama creates the opposite effect, and traders don’t want to be caught long if the financial markets implode.

The bottom line is both RBOB and HO are still both stuck in range-bound patterns, and while today’s action may be choppy, I don’t expect any new trends to be formed.

CLICK HERE for a PDF of this morning’s charts

 

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