Energy Futures Taking Lead From Equity Markets
Energy futures are taking the lead from equity markets in a modest recovery rally this morning, after reaching multi-month lows during a harsh selloff on Tuesday. US stock markets actually managed to erase most of their losses during Tuesday’s trading, but energy prices didn’t react much as it appears they were more focused on the Saudi’s new efforts to play nice with the world.
Despite the bounce, it’s been a brutal month for both energy and equity markets, with several indices having their worst monthly performance of the past 3 years. While short term technical indicators are in over-sold territory and begging for a corrective rally, longer term trend-lines are breaking down suggesting we could see more heavy selling before the end of the year.
It’s not just petroleum products & stocks that are feeling the pain in October. RIN values continue to come under pressure, with Ethanol RINs approaching a 6 year low below 9 cents/RIN this week as ethanol stocks remain ample, more small refinery exemption waivers have been requested, and an EPA proposal on RFS reforms is expected early next year.
An EIA report published this morning notes how the return of sanctions on Iran is creating uncertainty in oil price forecasts, while Global supply balances are still expected to outpace consumption in 2019.
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Energy Markets Hovering At Break Even Levels After 2 Days Of Strong Gains
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