Traders Taking Cues From Chart Dynamics

Energy futures continue to test the upper limits of their trading ranges today. The May heating oil and gasoline contracts have burst through their 5 and 10 week moving averages over the past couple days and are eyeing a run at $2.00 and $2.20 respectively. The crude oil chart looks similar, making $70 per barrel seem like a reasonable short-term price target.

This week’s rally in energy prices seem to be technically driven, with most traders taking cues from chart dynamics, while fundamental headlines seem to tug in opposite directions. Iran oil exports reach two-year highs just in time for China’s bump in demand recovery, leaving futures prices drifting higher to end the week.

The EIA published an article this morning on the surprise draw in the nation’s natural gas inventories last winter, despite the cold season being on the warmer side. The 5-year average natural gas inventory level dropped by more than 10% due to cold snaps in January and more notably mid-February and record NGL exports. Due to the unique circumstances of the past year heating oil stocks seemed unaffected.

Corn and soy oil futures prices continue their trek upward this week as ‘renewable energy’ headlines seem to permeate industry news. RIN prices for biofuel (D4) and ethanol (D6) remain elevated as their aforementioned underlying commodities press towards highs not seen since 2012.

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