Energy Futures Back On The Move

Energy futures are back on the move higher to start Friday’s session, wiping out most of their reversal Thursday losses in overnight trading. After leading the way higher for most of the year, RBOB futures are suddenly the weakest link in the energy chain, sparking calls for a seasonal top in gasoline prices.

Positive Chinese trade data is getting credit for the early move higher in stocks, along with a mega-deal in the oil patch, and the correlation between US equities and oil prices remains strong as the two asset classes trade in lock-step.

Was that it? Thursday’s reversal and today’s early lagging are sending warning signs that the spring gasoline rally may finally be coming to an end. Refiners are returning from planned and unplanned maintenance, and reports are surfacing that gasoline shipments from Asia are on the way to help heal the tight supply situation along the West Coast. While the momentum may have been lost this week, we’ll still need to see RBOB futures drop back below the $2 mark before the upward trend is broken.

Kind of a big deal: Chevron is buying Anadarko Petroleum for $33 billion as “big oil” once again starts flexing its muscle again, a sign that the recovery for upstream producers has reached the next level. Contrarians will suggest this type of a deal may be a sign of a pending market top, as the enthusiasm required for this large of a transaction can only happen when optimism is peaking.

CLICK HERE for a PDF of today's charts