Energy prices spiked to their highest levels in a month overnight after the US launched missile strikes against Syrian government forces. Prices flattened out this morning however as the attack appears to have been a relatively benign response to the chemical attacks earlier in the week, giving the situation a lower likelihood of spilling over to nearby countries or effecting oil supplies in the region.
RBOB gasoline prices reached their highest level since August of 2015 during the overnight price spike, and charts suggest that a run towards the $2 level is possible, something that was unthinkable when gasoline inventories reached record highs back in January.
Then just 2 minutes ahead of the March jobs report the entire complex suddenly sold off and turned lower for the day, only to recover back to positive ground in the 2 minutes following the report. That type of pre-action and reaction suggests that someone’s program was either trying to get out ahead of the market reaction to the report, or perhaps they forgot to wind their watch this morning.
The jobs report was soft in terms of growth with only 98,000 jobs added during March, but both the headline unemployment rate and U6 (aka the real unemployment rate) figure declining during the month.
These two events seem to leave us with more questions than answers this morning, and are already creating volatility without changing the trend. With energy prices up in 8 of the past 10 sessions, the momentum is clearly on the side of the bulls, and while the Syrian situation may not directly impact oil supplies, any unrest in that region has much more upside potential for oil prices than down.