It’s a mixed bag for energy prices this morning with gasoline prices lower, diesel prices higher and crude trading flat as the complex tries to decide what to do now that the July rally finally stalled out.
Early on in Tuesday’s session it appeared like we could see a major sell-off coming as refined products were down close to 4 cents and crude was approaching a $2/barrel loss, setting up an outside down daily bar that has been the hallmark of the past 3 big sell-offs we’ve witnessed over the past several months. The buyers stepped up heading into the close however, salvaging the prospects that the July rally is just cooling its heels and not reversing completely.
The $48 mark is currently close to where the bull-trend line for WTI stands from the June low at $42, so as long as prices stay north of that level, the potential for another push higher remains.
Yesterday afternoon the API was said to report builds in crude oil inventories – 1.7 million barrels total US, 2.5 million at the Cushing OK hub – and draws in refined products – 4.8 million barrels for gasoline and 1.2 for diesel. The DOE report is due out at 9:30 central.
US equity indices set fresh record highs yesterday, as volatility remains abnormally low. As has been the case for most of the past year, energy prices didn’t seem to care as the correlation between asset classes remains low, although volatility in oil prices is also holding towards the bottom end of the range.