Energy Prices Step Lower

On March 22, 2013 by TradingDesk

Energy prices took another step lower Thursday on the heels of a tumbling Brent crude contract and US Stocks. Brent has dropped to its lowest levels of the year this week as production in the north sea has outpaced estimates, Sudan has returned to its role as a crude exporter, and as the latest Eurodrama plays out in Cyprus. US Stocks have seemed to largely shrugged off the news across the pond, but a single line in the FED’s statement from Wednesday has sparked debate that Ben Bernanke has begun compromising with the more hawkish members of the FOMC, which pushed stocks lower.

April HO was the only energy contract to finish in the Green Thursday as liquidity for the soon-to-be defunct delivery specification dries up. With only 5 trading sessions until the ULSD spec takes over, watch the forward months of HO to get the real feel for what diesel prices are doing. Those contracts have fallen below $3, and continue to point to lower prices ahead. RBOB meanwhile has continued its manic behavior, but is near the lower end of its range. Charts for the gasoline contract are stuck in neutral, with a break below $3 or above $3.25 needed for further direction.

This single sentence is causing a great deal of heartburn for holders of US stocks.

http://www.federalreserve.gov/newsevents/press/monetary/20130320a.htm

In determining the size, pace, and composition of its asset purchases, the Committee will continue to take appropriate account of the likely efficacy and costs of such purchases as well as the extent of progress toward its economic objectives.

 

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