Libya News Sends Energy Futures Lower

On April 7, 2014 by TradingDesk

Energy futures are sliding this morning after new reports of a deal in Libya, and in sympathy with a broad sell-off in global equity markets.

Libyan government officials have reportedly reached a deal with protesters to immediately open 2 of 4 ports that have been shut down for 8 months, and to have further talks on the other 2. If this is true (there have been several false starts) exports should begin hitting the global market in the next 2 weeks.

The outlook for prices as we move through April remains muddled, with Brent and ULSD prices still perilously close to a major sell-off, while WTI and RBOB look to be contentedly neutral. With charts providing little direction, look for the Libyan headlines to dictate price action this week.

Non-Commercial long positions (betting on higher prices) rose fractionally in WTI last week, and remain well above their highest levels ever for this time of the year. Some analysts continue to point at this as a reason why the complex could sell off sharply, while the potential for a “Golden Cross” chart pattern (50 day MA crossing over the 200 day MA) may be reason enough for those funds to stay put. The relatively neutral positions in Brent/ULSD and RBOB suggest that the WTI net longs may be more of a bet on shrinking stocks in the Cushing OK hub rather than a bet on the entire energy market moving higher.

CFTC Commitments of Traders historical charts.   (CLICK HERE FOR PDF)

Market UpdateWTI NON CommitWTI Managed

Brent managedHO non commHO Managed NetgRBOB Non ComRBOB Managed Net

 

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