Markets around the world are celebrating this morning after the Chinese president gave a speech that cooled off much of the trade war talk that has dominated the headlines over the past few weeks. Although this story is likely to remain at the forefront for weeks to come, the conciliatory tone struck is helping both energy and equity prices get off to a strong start.
Oil & refined products have already recovered almost all of last week’s heavy losses, meaning the weekly bull trend line in place since last June’s low at $42 for WTI has held yet again. The bounce off of technical support looks like it might set up a test of the top-end of the spring trading range at $66 for WTI, $71 for Brent and $2.05 for both RBOB and ULSD. Whether or not prices can break through those resistance layers will determine if we continue the choppy, sideways action, or if there’s another rally to come.
The latest chapter in the RFS saga started with several US senators writing a letter to the President, urging him to stop the EPA from granting any more small refinery waivers. The letter came ahead of another meeting at the White House to discuss the political football known as the Renewable Fuel Standard. It doesn’t appear that any changes came from the meeting, and 2018 ethanol RINs have held steady around the 35 cent mark.
In case you’re worried that only the US government is having a hard time dealing with energy politics, take a look at our friends to the north – and the largest importer of crude to the US – who are facing their own challenges getting their vast oil reserves to the global market.