Energy Futures Trying To Rally

On October 25, 2012 by TradingDesk

Energy futures are trying to rally again this morning, after yesterday’s bounce was wiped out by slumping stock markets and weak demand estimates from the DOE. While RBOB did settle lower for the 10th straight session – the first time that’s happened in the 25+ year history of gasoline futures – it managed to bounce off of support near $2.57 for a second straight day. Likewise, HO bent – dropping to its lowest level in 3 months – but did not break, bouncing off of its lows to finish with losses of less than a penny.

Technical studies continue to suggest lower prices are coming, but given the oversold condition, recent bounces off of support, and the fact that it’s Thursday, don’t be surprised by a sharp reversal today. The big question is can it be sustained.

Hurricane Sandy made landfall in Cuba overnight as a Category 2 storm, and models are projecting an increased threat to the US East Coast as early as Monday. While refining activity is limited in the area – only a direct hit on Philadelphia is likely to have a sustained impact on PADD 1 operations – local disruptions due to power outages and flooding are possible from northern Virginia to Boston.

CLICK HERE for a PDF of this morning’s charts

 

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