Energy Futures In “Wait and See” Mode

On April 21, 2014 by TradingDesk

Energy futures seem to have moved into a “wait and see” mode, after a long weekend capped 3 weeks of gains that have added $6/barrel to Brent and WTI crude prices, 20 cents/gallon to RBOB gasoline and 15 cents to ULSD. The Ukrainian crisis continues to dominate headlines, although the impact on markets, both physical and financial is debatable. Libyan ports are in fact restarting, but technical issues surrounding operations that have been shuttered for nearly a year are delaying output and tempering any bearish influences on physical crude values.

Technically, refined products are beginning to show signs of topping out as ULSD failed to hold above its 100 & 200 day moving averages last week, and RBOB prices are showing the early stages of a rounding top. That said, several indicators continue to point to higher prices, and if current resistance breaks, there is little on the charts to prevent another 20 cents of gains for both RBOB and ULSD.

In other news, Reuters is reporting that Barclays is the latest bank to announce that it would pull out of a major portion of its commodity trading.

Investors poured into Brent crude and RBOB gasoline long positions last week, marking a dramatic increase on the amount of speculative money betting on higher prices.

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