WTI Capps Best Two Week Rally Since Last July

On April 30, 2013 by TradingDesk

WTI capped its best two week rally since July yesterday, rising nearly $9/barrel in the past 9 trading sessions, despite swelling domestic stockpiles and production. Refined products again chose to take their direction from Brent crude and finished modestly in the red, as they continue to consolidate after April’s big sell-off. Although charts are stuck in neutral, and both RBOB and HO have well-established support in the low $2.70s, some caution is warranted as we head into May, since the month has brought price drops of 30-50 cents in each of the past 3 years. A similar drop this year would put prices right at the lows of last summer, and would go a long way in determining if the early 2013 selloff was the start of a major bear market in energy prices, or simply a seasonal swoon.

The real action yesterday came from the grain pits, as corn surged 6% due to wet weather delaying planting across much of the Midwest. Ethanol values spiked 11 cents as a result, and 2013 RINs climbed back above 70 cents. With ethanol supplies already struggling to recover from limited railcar availability and reduced production, prompt prices in some markets are now nearing $3 for the first time in 2 years.

CLICK HERE for a PDF of this morning’s charts

 

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