RBOB and ULSD Futures Finish the Day In the Green

On February 21, 2014 by TradingDesk

Yesterday’s price “correction” for RBOB and ULSD futures lasted only a few hours, with both products erasing early losses and finishing the day well into the green. The DOE report was something of a non-event, as headline values were little changed amid the backdrop of weak demand, high refinery output and exports to balance the equation. Both Brent and WTI crude saw slight losses on the day, but the escalation of violence in Ukraine, Libya, Iraq and Venezuela seems to have put a floor under crude values for now.

Looking forward, the technical outlook remains bullish for all contracts, and continued spring rally looks likely over the next several weeks. That said, warmer weather across the eastern seaboard could go a long way to heal the desperate supply situation for natural gas, propane and diesel, and ULSD values could slide down the steep curve of backwardation. Most of the trading volume will switch to the April futures contract early next week, and $3 will become the key support level for both RBOB and ULSD, with upside potential into the $3.20s should that support hold.

CLICK HERE for a PDF of today’s charts

Market Update (3)

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