The Energy Complex Is Trading Lower This Morning With WTI Futures Leading The Way Lower
The energy complex is trading lower this morning with WTI futures leading the way lower, shaving nearly $5 off the prompt month contract. Chinese low growth demand estimates are taking credit for this morning’s selloff which is pushing American crude oil prices down to the lowest levels seen since February this year. Refined product futures are following suit this morning with both gasoline and diesel prices dropping 10-13 cents.
Money managers trimmed their long positions and bolstered their short positions of WTI crude oil futures last week. The “smart” money earned their title’s quotations marks as the oil benchmark jumped nearly $4 from 8/8 to 8/12. Speculators did the same with their positions in RBOB, European crude oil, and gasoil last week but ULSD continued to stand out from its counterparts. Market bettors continued to trim their shorts resulting in an increase of their net position for the 6th week in a row.
The National Hurricane Center is tracking a storm just north of the Lesser Antilles but give the system a 0% chance of organizing within the next couple days. While it may seem like 2022’s Atlantic hurricane season is a snoozefest, its important to remember that on average the largest hurricanes typically come in the months of September and October.
RBOB futures are testing some technical support on their weekly charts this morning, possibly turning the low $2.90s into a key level in deciding whether prices can continue falling. Should gasoline prices fall and stay below that level, there is little on the charts to keep them from continuing lower to the $2.70s. Diesel futures on the other hand face a myriad of technical resistance levels between where we are trading currently, the $3.40s, and the $3.20s. If we see a meltdown in energy prices over the next couple weeks, expect distillate prices to drop much slower than the rest of the complex.