Trendlines Stayed Intact Through Yesterday’s Round Of Selling

The 1 ½ year old bullish trendlines stayed intact through yesterday’s round of selling. Prompt month refined products futures trimmed a neat 1-1½% during Thursday’s formal trading session. Both American and European crude oil benchmarks saw a similar pullback as traders chalk up the day’s price action as profit-taking.

It looks like all heating fuels are expected to be costly this winter as the EIA adds propane to the list. Low inventory levels caused by supply/logistics bottlenecks and an unseasonably cold winter seem to be the common threads behind the prediction for heating fuels.

4-D chess or lost in translation? While it seems the headlines are painting Putin as a welcher, the Kremlin has stated earlier their help may come with a cost. Regardless, natural gas futures prices have pulled back from the 13-year high that they set earlier this month and are currently trading at $5.30 MMBtu.

The energy complex will need to extend its buying today if futures are to add their fifth consecutive week of gains. While yesterday’s selloff was likely a healthy pullback, most technical indicators are still flashing ‘overbought’ signals. A sizeable pullback seems to be in the cards, its just the age-old matter of “when”.

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