Energy Futures Are Drifting Higher This Morning
Energy futures are drifting higher this morning after the big three contracts ended last week with across-the-board losses. Prompt month West Texas Intermediate futures are leading the way this morning showing 1% gains in early trading; gas and diesel futures are tagging along at .3% gains.
Money managers (aka “Smart Money”) trimmed their net positions in all four of the main energy contracts last week. Not only were long positions liquidated, new short positions were added for each of the American contracts, further suggesting more traders are betting on lower prices in the near future.
Baker Hughes reported an addition of 6 operating oil production rigs las week. It isn’t difficult to see why there are twice as many platforms running than there were a year ago: oil prices have doubled in the same time frame.
The rounding top chart pattern all three American benchmarks are showing have held their form despite Friday’s buying. If the pattern holds and becomes valid, we could see 30-40 cents come out of refined product prices in short order. Oil futures could be slashed by $20 per barrel at the same time.