Refined Product Futures Mirror the Direction of US Equities

On March 25, 2014 by TradingDesk

Refined product futures had their second “head fake” trading session in a row Monday, moving higher in the morning, only to stall out at technical resistance levels and move lower in the afternoon. The action seemed to mirror the direction of US Equities, and suggests that energy prices are searching for direction from outside sources as they consolidate. The 14 day MA has become the resistance level of choice for both RBOB and ULSD futures, and is being tested again this morning, and is likely to be the deciding factor between a run at $3 for both products, or a test of new lows as we end the month.

The coast guard is preparing to re-open the Houston Ship Channel, which should limit any price impact of this weekend’s spill, despite the fact that Exxon confirmed its Baytown refinery was forced to cut runs as a result of the delay in ships available.

Ethanol continues to steal the show in terms of price action, adding another 20 cents to spot values in Chicago yesterday, as the country’s hub races to catch up with coastal markets that had been trading north of $3 for weeks as the country struggles to catch up with deliveries due to rail delays and a lack of cars.

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