Energy Futures Continuing to Correct Lower

On July 25, 2013 by TradingDesk

Energy futures are continuing to correct lower, despite a bullish DOE report yesterday which showed product demand and exports rising, while stocks fell across the board. Although a single day’s move is far from a trend, it does prove once again that fundamentals are still not the main driver of price action. Both RBOB and WTI traded down to $3.01 overnight, but have not been able to test the pivotal $3 mark yet. The price action at this level will go a long way to determine whether prices drop back to the spring support layers around $2.70, or push towards the 2013 highs.

Tropical storm Dorian was named in the Eastern Atlantic yesterday, and while it is still very early in its development, several forecasting models suggest it could hit the US East Coast next week. A larger storm may be building in Washington DC however, as the Department of Justice has now opened a probe into metal warehouses, run by the largest banks, and the potential for price manipulation. This adds to a long list of inquiries in the past week which have the potential to change commodity trading as we’ve known it for the past decade if banks are restricted or excluded from trading.

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