DOE Release Will Likely Dictate Price Action

On April 9, 2014 by TradingDesk

The EIA’s Short Term Energy Outlook (STEO), published yesterday, expects a decrease in short term crude production and a draw in crude inventories at Cushing which rallied the energy complex yesterday. WTI settled up $2 at $102.59/bbl; the highest level in over a month. Refined products also saw a strong run-up with both gas and diesel futures contracts settling above major resistance levels. European crude saw (smaller) gains as a fist fight erupted in the Ukrainian Parliament further portraying the precarious sentiment in Eastern Europe.

Physical markets remained relatively quiet yesterday with the majority of the action taking place in regions’ gas grades. Most markets, specifically the Gulf Coast as they digest the reopening of the Houston shipway, pushed back against NYMEX RBOB’s nickel gain and dropped up to 2 ½ cents relative to the futures contract. Physical ULSD traded sideways against HO’s 4 ½ cent rally.

Today’s DOE release will likely dictate the majority of the price action as traders are expecting a nationwide draw in refined products and crude oil. RBOB will run into a major ceiling around $3 if the release is bullish; ULSD will see the same around $2.96.

CLICK HERE for a PDF of today’s chart

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