Energy Futures Continuing their Correction Today

On July 26, 2013 by TradingDesk

Energy futures are continuing their bend-don’t-break correction today, with RBOB prices down a dime and ULSD down more 7 cents for the week, while pivotal support at $3 has held up so far. Early in Thursday’s session it appeared that we were on a verge of a major sell-off, with RBOB values down more than 7 cents for the day and momentum building to the downside. A late-morning buying spree halved those losses and sent ULSD briefly back into positive territory, suggesting that it’s too early to call the end to the summer’s bull run.

While refined product traders watch closely for price reaction in a small range around $3, ethanol continues to steal the show with prices having dropped 20 cents in the past week, and RIN values plummeting from $1.20 to $.95, then rallying back to $1.12 only to drop again and end the day at $1. Outside of a major hurricane event, or the volatile Chicago pipeline market, those types of price swings are extremely rare in energy markets, and will be sure to wreak havoc on nationwide rack prices as refiners struggle to determine what the real break-even value of their product is.

CLICK HERE for a PDF of today’s chart

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