Fed Announcement Results in Convincing Gains

On September 19, 2013 by TradingDesk

The energy complex started off confused yesterday with RBOB showing slight gains and ULSD continuing its two-day losing streak. The DOE reported inventory draws in both products along with crude that gave prices a bit of a bump but it wasn’t until the Fed announced they will not begin the taper yet that really kicked things into gear. Commodities, equities, and metals posted convincing gains for the day: NYMEX gas futures settled up a steep 8 cents, ULSD up about half that, WTI added $2.65/bbl. Although Brent crude also printed gains today, its premium to WTI shrunk to just over $2/bbl.

It will be interesting to see how prices will react as they refocus on the some fundamental issues still looming. Libya is set to two oil fields today, totaling about 370k barrels per day of output, which still puts the total country’s capacity under half of its pre-war output. If all goes as planned and 700k bbls/day are added back into supply by Friday, energy prices could resume their slide.

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