DOE Shows Builds Across the Board

On June 27, 2013 by TradingDesk

Yesterday’s DOE report showed builds across the board for crude and refined products, as sluggish demand continued across the country, refiners ramped up run rates, and domestic crude production grew. The initial market reaction was swift, with heavy selling for all contracts immediately after the report, but sellers were unable to break through technical support, and by the end of the day, most of those losses were erased. RBOB most notably briefly ticked at its lowest level of the year, $2.6870, only to rebound off the same area that sparked a 20 cent bounce in May. ULSD futures touched $2.82 for the third time in 4 sessions, only to rally from that level once again.

As the charts below show, the US is facing a glut of Crude and Gasoline stocks, while exports and average demand have helped diesel inventories remain on the lower end of their 5-year range. With these fundamental factors weighing on prices, and technical studies turning more bearish, expect the bottom end of our trading ranges to be tested again in the near future. If these support levels finally break, both refined product contracts appear to have another 15-20 cents to fall.

CLICK HERE for a PDF of today’s charts

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