Energy Prices Pull Back From Major Sell-Off

On March 7, 2014 by TradingDesk

Energy prices pulled back from the brink of a major sell-off Thursday, reversing sharp early morning losses in the afternoon, and moving sideways overnight. After 3 dramatic days of trading following the drama in Ukraine, it appears – so far anyway – that markets are prepared to limp into the weekend.

The technical outlook continues to show vulnerability in crude and refined products, as the trend-lines that have supported higher prices to 2014 are breaking down. With speculative funds holding record high levels of bets on higher crude prices, many analysts are suggesting that this week’s selling could spark a wave of liquidation that brings WTI values back below $100.

RBOB and ULSD values remain below $3, and the longer they stay below that pivotal level, the more likely it becomes that we’ve already seen the high prices for the spring, in what would be an abbreviated version of the traditional seasonal rally in prices. The transition to low RVP gasoline does leave many regions vulnerable to price spikes however – as we’ve seen this week in the Midwest – as refiners have to re-tool their plants to meet the more stringent spec.

This morning’s Jobs report has been a non-issue for energy and equity prices so far.

CLICK HERE for a PDF of today’s charts

Market Update (3)

http://www.bls.gov/news.release/empsit.nr0.htm

THE EMPLOYMENT SITUATION — FEBRUARY 2014

Total nonfarm payroll employment increased by 175,000 in February, and the unemployment rate was little changed at 6.7 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services and in wholesale trade but declined in information.

Table A

 

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