Energy Prices Give Back All Of Their Crisis Gains

On March 5, 2014 by TradingDesk

Global equity and commodity markets breathed a sigh of relief Tuesday as Russia took a step back from war in the Ukraine. While tensions remain high, and Russian troops remain in control of parts of the country, the S&P 500 pushed to another record high, and energy prices gave back all of their crisis gains.

Brent crude is now leading the energy complex lower, the first of the 4 major contracts to break its bullish 2014 trend-line and testing support at the 200 day MA. While WTI is still holding above its trend – causing the gap between the two grades of crude to shrink further – the price action in Brent to end the week may dictate direction for refined products. ULSD is currently testing a cluster of support between 100 and 200 day moving averages between $3 and $3.01. RBOB is also testing its bull trend-line, that led the April contract from $2.78 in early February all the way to $3.05 Monday morning. If this line breaks down, a counter-seasonal move back into the $2.80s looks possible.

Today’s DOE report will be watched closely to see if the rumored armada of boats carrying diesel imports to the US East coast to help relieve the desperate supply situation in Padd 1 materialized last week. US refiners are also entering a busy maintenance period, so total crude runs will be a key number to keep an eye on over the next few weeks.

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