Equity Sell-Off Putting Downward Pressure On Energy Prices

On January 31, 2014 by TradingDesk

Asian/European and US equity markets are selling off sharply this morning, putting downward pressure on energy prices. Emerging markets and European deflation concerns are grabbing most of the headlines, and sharp rises in gold and US Treasury prices suggest that today’s action may be driven by a general “risk off” sentiment.

Dislocated diesel prices continue to be the major story in US energy markets this week. Prompt ULSD futures are testing the highs from 2013, but when the February contract expires today, we’ll begin trading a remarkable 19 cents lower for the March contract. RBOB gasoline prices were given a boost by news that the P66 Bayway NJ Plant suffered an upset yesterday, but those gains have already been given back overnight as prices slog through a neutral technical outlook.

As we put the first month of the year in the books, it appears that a return to volatility (after the relative quiet of 2013) may be in the cards this year.

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Market Update

 

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