Stocks Pulled Back From Monday’s Big Gains, While Energy Remains A Political Football

On March 28, 2012 by TradingDesk

Stocks pulled back from Monday’s big gains yesterday morning, following several soft economic data points. Energy prices were slipping in sympathy, then the selling picked up following a Bloomberg headline which suggested the White House was prepared to announce a release of US SPR oil stocks to win an election try and lower prices.

Not to be out-done, this morning a French newspaper announced that the country is in contact with Britain and the US, and that a release of strategic stocks was a matter of weeks away. Prices have fallen on the news, but as has become the pattern of late, are already bouncing as the rumors are refuted. It’s impossible to say what the politicians have decided, but looking to last year’s coordinated effort as a guide, it does seem safe to say that any impact on prices will be short lived.

The US Commodity Futures Trading Commission (CFTC) also issued an advisory, reminding traders that it would still be enforcing position limits on speculative positions. The motive for the warning wasn’t stated, but the resultant short-term selling that resulted shows just how much hot money there is influencing prices these days.

Meanwhile, in the physical energy market, last night’s API report showed builds in Crude and Gasoline stocks, and a draw in distillates. The DOE report is expected to show the same at 9:30 today, with the hotly debated, historically weak, demand figures surely to draw the most attention. The technical outlook remains stuck in neutral.

CLICK HERE for a PDF of this morning’s charts

 

 

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