Prices Pulling Back Fractionally This Morning

On March 31, 2014 by TradingDesk

Energy prices finished last week on a strong note, with refined products finally able to break above their respective 14 day moving averages (which had stifled rallies in 4 of the 5 previous trading sessions) on the heels of fresh tensions around the Ukraine. Prices are pulling back fractionally this morning as there was not an escalation over the weekend as many had feared. Prices are now firmly set in a range between $2.90 and $3 for both RBOB and ULSD, and the direction we break out of this range in may dictate the price action for the next few weeks.

Fundamentally, the global outlook for energy supplies remains somewhat soft, as Iraq and Iran were both reported to have pumped more oil than expected over the past few months, offsetting the output losses from Libya.

Speculative positions in energy futures & options were little changed last week. WTI and Brent held their net long positions at or near seasonal highs – betting on higher prices – while RBOB and ULSD held near their average net-length for this time of year.

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