Big Week For Energy Prices

It was a big week for energy prices with both gas and diesel futures adding around 10 cents on the prompt month contracts through the 21st. West Texas Intermediate crude oil futures lead the pack, however, with gains of $5 per barrel, Brent futures followed closely behind with gains of over $3.

Tensions in the Middle East, which seem to be heating up or cooling down depending on who you ask, are taking credit for the early buying pressure we are seeing this morning. With American crude up almost 50 cents and European crude flat, the latter is more likely the general consensus among traders. With prompt month RBOB up almost 3 cents and HO up 50 points, the early buying could be leftover bullish sentiment from last week’s FOMC meeting which pushed stocks to all-time highs.

Managed money in WTI saw a bump in net position last week, pulling their collective net length back from seasonal 5-year low. “Smart” money also added some length in refined product positions but continued consolidating in Brent crude futures, placing their position firmly below the 5-year average.

Baker Hughes reported an increase in national oil rig counts for the first time in 3 weeks. With 789 oil exploration rigs active as of last Friday, the total count is still 73 rigs shy of last year’s total, which makes sense given the big pullback in prices we’ve seen in WTI prices since October’s peak at $77.

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