Energy Prices Sent to Their Highest Levels in a Month

On November 20, 2012 by TradingDesk

A surge in stock prices, a stronger EUR/USD and continued fighting in Gaza sent energy prices to their highest levels in a month Monday. European gasoil lead the move, gaining more than 4% after inventory at the Amsterdam/Rotterdam/Antwerp (ARA) hub dropped to their lowest levels in a year. Heating Oil rallied in sympathy, leading US futures with a 9 cent gain. The US diesel market remains stuck in a fundamental conundrum, with inventories at 5 year lows, but with refinery output at record highs, with 1 million + barrels/day of exports balancing the equation, but leaving US physical and financial markets subject to volatility across the pond.

A downgrade of French debt – Moody’s stripped the country of its increasingly-rare AAA rating – and talks of an Israeli ceasefire have done little to change the tone this morning, although minor pullbacks are happening across the board. RBOB remains the weak link, as the slow recovery of East Coast infrastructure continues.

The question of the week is if yesterday’s rally was just a correction of the past month’s sell-off, or the start of a new bull market. Seasonal factors suggest this is a correction, and lower prices are still ahead of us before year end. With the next layers of resistance another 8-10 cents above current levels however, there is still more room to the upside if stocks continue to rally and if Middle East tensions don’t cool.

CLICK HERE for a PDF of today’s chart

Comments are closed.