• Our Companies
The Arnolds Companies

Spring Breakout Rally Continues For Energy Futures

Tuesday, Mar 19 2019
Market Talk

The spring breakout rally continues for energy futures as fundamental and financial factors all appear to be aligning short term to send oil & gasoline prices to fresh 4 month highs. OPEC+ production cuts, and a rash of unplanned refinery & terminal issues along with stronger equities and a weaker dollar are getting some of the credit for the rally. From a chart perspective, the window appears open for further upside over the next few weeks.

The fire at the Deer Park terminal facility along the Houston ship channel has spread from 2 tanks to 8, and is expected to continue burning for at least another day. While the pictures are dramatic, the impact to the market will be minimal as long as the operations of nearby refineries and shipping lanes remain unaffected.

The 30 day correlation between WTI & the S&P 500 is holding around 90%, and both are moving higher again this morning. Volatility indices for WTI and the S&P 500 (aka the VIX, aka the “fear index”) have reached 6 month lows this week as the climb higher seems to have soothed some of the concerns over a pending recession.

The US Dollar has been softening of late as well, which tends to get credit for stronger commodity prices, even though energy and currencies have had a weak correlation for more than a year. More calls for the FED to lower interest rates to stave off a recession seem to be driving the dollar weakness – and likely some of the equity strength - as the FOMC starts a 2 day meeting today. The CME’s Fedwatch tool shows traders are giving just a 1.3% chance of an interest rate cut at this meeting, and a zero percent chance of an increase, meaning tomorrow’s announcement will be mainly important for signals on what might come later in the year. Traders so far are pricing in a 24% probability that interest rates get cut by at least 25 points before year end.

CLICK HERE for a PDF of today's charts

TAC - The Arnold CompaniesTACenergyTAC Air

Latest Posts

KTBS 3 Spotlight on TACenergy Leadership COO Fred Sloan - Sharing Thoughts on Changes in the Gas Market
Go Rentals Opens 10 New Locations with Partner, TAC Air
Tac Air's new facility features B17-G model airplane, Military Situation Room
TAC Air B-17G Model Brings Nostalgia and Tears

Archive

Latest Posts

Archive

The Arnold Companies
  • About
  • News & Views
  • Social Media
  • Contact Us
TACenergy
  • Supply
  • Customer Login
  • Apply For Credit
  • Market Talk Updates
  • Contacts
  • Blog
  • Social Media
Find Your Next Great Role With TAC.
Explore Careers
  • Privacy Policy
  • Terms of Use
  • Employee Login
  • Sitemap
TAC - The Arnold Companies © 2022. All Rights Reserved.