Refined Product Prices Dealt A Major Blow While RBOB and HO Stage An Impressive Rebound

On February 28, 2013 by TradingDesk

Refined product prices were dealt a major blow by Wednesday’s DOE report, which showed that US Refiners are coming out of a heavy maintenance period at a much faster pace than forecast, calming concerns of product shortages due to low production.

RBOB gasoline futures are poised for their worst week since the US Debt Downgrade in August 2011 fueled a wide-spread selling spree across commodity and stock markets. While it may seem a foregone conclusion that the 30 cent drop from Monday morning spells the end of the 2013 pre-spring rally, the chart below suggests that prices have just now reconnected with their bullish trend line for the low RVP April contract. In order for an argument to be made that the rally is over, the April contract should open as the prompt contract tomorrow trading below $3.08, and HO must break decisively below its 200 day Moving Average (long believed to be the hedge fund indicator of choice) at $2.9869.

The notable difference this week from the last time we saw this type of selling in energy futures is that RBOB and HO are moving independently of US stock indices, which have staged an impressive rebound after Monday’s panic, and are now poised once again to test their all-time highs.

CLICK HERE for a PDF of this morning’s charts



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