The back and forth action continues for energy prices as they remain stuck in their trading range waiting for the next big thing before making their next big move. Yesterday WTI traded up to $50 before falling off, and this morning it traded down to $48.50 before bouncing back to flat, showing the lack of conviction in a sustained move in either direction.
As long as crude can hold above $48, the bull trend line remains intact, but short term technical indicators are moving into neutral territory, and if we don’t get a push higher soon, we could see more selling as the trend lines fall.
The FERC can get back to business after 6 months without the quorum needed to make rulings on interstate pipeline projects and other energy issues. Two new commissioners were approved by the senate Thursday.
The July Jobs report showed 209,000 jobs added, with the headline (aka “manipulated”) and U6 (aka “real) unemployment rates holding steady at 4.3% and 8.6% respectively. Markets barely flinched after the report as it is in line with many forecasts, and should be another month of “good enough” growth to keep the FED on their current track.
The WSJ reported today that the Saudi’s are in talks to buy a large refinery in China, which would be another step in the Kingdom’s global plan to find steady homes for its exports beyond the US gulf coast.
We are rapidly approaching the peak of hurricane season and two different systems are being watched closely for potential development next week. Something to pay close attention to this year, given the growing reliance on exports to balance the US supply/demand equation, if a hurricane makes its way into the gulf but doesn’t damage refineries, it could have a negative impact (theoretically at least) on Gulf Coast basis values as the exports may temporarily be stranded at home.