Energy Complex Sees Relief

On August 30, 2013 by TradingDesk

The energy complex saw some relief yesterday in response to British Parliament’s rejection of PM Cameron’s proposal to interfere in Syria, consequentially leaving the US out to dry. Heating Oil gave back about 2.3 cents of Wednesday’s rally; RBOB dropped 2.8 cents. WTI and Brent prices saw a similar pull-back as traders seem willing to bring this thing back to rationality if missiles don’t start flying. Likewise, equity markets continued to rebound due to dovish war dialogue in addition to jobless claims coming in at a 6-year low and an upward revision in US GDP growth from an expansion of 1.6% to 2.5%.

Cyclone developments in the Atlantic remain unlikely as a wave 1,000 miles off the coast of The Lesser Antilles is expected to meet dampening upper-level winds. However, a wave about to depart from the west coast of Africa shows favorable signs for development in the next 2-3 days which could result in some nervous trading in the coming week. Yesterday, however, physical markets all but posted ‘Z’s with only Chicago RBOB showing life by tacking 4 cents onto its .1350 premium to RBOB.

After yesterday’s decline, the highs set by the Syria rally will provide some resistance around the 3.225 level for ULSD and 3.11 for RBOB. If for some reason we wake up on Saturday and think something needs to go boom, 3.16 and 3.23 will be a couple of hard ceilings for gas and diesel, respectively.

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