Energy Markets Open On A Soft Note

On December 23, 2013 by TradingDesk

Energy markets are opening on a soft note, after one of the strongest weeks of the year fueled by the FED, and refinery issues across the globe. RBOB gasoline futures were up 15 cents last week, while Gulf Coast grades were up 20, and Group 3 barrels were up 26. Diesel prices lagged, with ULSD futures outpacing most cash markets with 10 cent gains. The move leaves both refined product contracts on the verge of a technical breakout to the upside, that could add another 15-20 cents to current values. The next big test for RBOB, now that its moved above its November highs is the 200 day MA at $2.82. ULSD still must break its November high just below $3.09 to set up a move into the mid $3.20s.

The CFTC reported that speculators reduced their long bets in both RBOB and ULSD last week, while they maintained their positions in WTI. Curiously, the ICE commitments of traders report shows that the managed (speculative) net long position in Brent dropped to its lowest level of the year as of December 17, which means investment funds may have missed out on the move. Of course, like the CFTC’s report, the delay from the collection date to the report date makes it impossible to know what, if any, impact those positions had on trading in the back half of the week.

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