Rally in Gasoline Prices Comes to a Halt

On February 13, 2014 by TradingDesk

Weak demand figures reported by the DOE, and a winter storm which is preventing driving across much of the East Coast, have tag-teamed to halt the rally in gasoline prices this week. There have not yet been any reports of disruptions to refineries or other infrastructure – particularly the Colonial pipeline – despite the weather, so this latest storm has the potential to actually help heal the desperate diesel supply situation in the region. The DOE report once again highlighted the struggle the country is facing moving ULSD from the amply supplied PADD 3 refining region into amply populated PADD 1 region.

Global equities are selling off overnight, which appears to be weighing on both Brent and WTI crude, as the correlation between daily movements in equity and energy markets has strengthened over the past few weeks.

Looking forward, the trend for RBOB gasoline remains higher, despite a 7 cent pull-back from yesterday’s highs and a failure to hold above the 200 day MA, while ULSD values are stuck in neutral in a narrow range between $3 and $3.05.

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