Traders Consider Refined Products' Technical Landscape

ULSD futures broke their December lows Monday morning and promptly dropped another 10 cents in a classic technical follow through after support fails to hold. Since then, however prices have bounced by 18 cents in a sign that the computer programs that make up most daily trading are still capable of buying, and that the bulls aren’t completely capitulating after a 92 cent drop in 10 trading days. If prices can remain above the $2.76 range than that brief foray to $2.66 will look like a bear trap on the charts, and we could be set for another run above $3 as the market works off an oversold condition. That said, if $2.76 fails again, then this may be nothing more than a brief corrective bounce on the way to $2.50.
RBOB gasoline futures dropped 44 cents during this sell-off bottoming out at $2.02 on Friday and have taken the lead in the recovery rally taking back 1/3 of those losses already. If the bounce in gasoline prices continues, there’s a potential for a reverse head and shoulders weekly chart pattern that would mark the end of the bear market in place since prices topped out at $4.32 in June and would set the stage for a classic spring rally that would push futures north of $3 again.
RINs have also joined in the selling over the past several sessions, falling to a 6-month low, albeit in a much less dramatic fashion than the notoriously volatile swings we’ve become accustomed to over the past decade.
Another fire at a Russian oil refinery is raising questions about whether sabotage at strategic facilities within the country is expanding, if the removal of Western experts from the Russian energy industry is taking a toll, or perhaps they’re just like any other refinery in the world, susceptible to fires as they put millions of gallons of flammable liquids under high heat and pressure.
Speaking of which, a week after an Iranian refinery mysteriously caught fire, the country offered to lend its “expertise” to Venezuela to help it repair and rebuild its refinery network that is operating at less than 10% of capacity due to years of neglect and mismanagement.
The death toll in Turkey and Syria has passed 5,000 after a devastating string of earthquakes. The major oil terminal on the Mediterranean remains shut but is expected to reopen today and should not have any lasting impact on energy markets.
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Energy Futures Seeing Trading Gains While Crude Oil And Diesel Decline

Diesel Demand At 3 Year High
