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RBOB Market Update for 15.07.13: The Coming Sticker Shock

September RBOB has appreciated 13% in the last three weeks lifting prices to fresh intra-day highs in Friday’s session trading above the February highs. I see this move in the 9th inning and expect a retracement in the immediate future. This goes hand in hand with my prediction of a trade lower in WTI in the coming weeks.
 
In February after peaking out just above $3.06/gallon futures traded lower 9 consecutive session retracing 50% dropping just better than 20 cents within that time frame. Past performance is not indicative of future results. 
 
RBOB Price Chart
Click to enlarge.
 
I’m operating under the influence that prices are very close to establishing an interim top. I suggest using the Fibonacci levels (white jagged lines) as trading objectives as we start depreciating in the coming weeks. A settlement below the 8 day MA (orange line) which is a dime off current trade would be the first confirmation that lower trade is likely.
 
I am not looking for a collapse and expect prices to be range bound for several months moving forward. The approach is to attempt bearish trade at the upper end of the range and bullish trade near the lower end of the range. As seen on the chart below the EIA does not look for any significant appreciation of deprecation in RBOB either as their projections do not have prices wandering too far from current levels. 
 
Gasoline Retail Price in US

By. Matthew Bradbard

Risk Disclaimer: This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities and/ or financial products herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed to be accurate. You should fully understand the risks associated with trading futures, options and retail off-exchange foreign currency transactions (“Forex”) before making any trades. Trading futures, options, and Forex involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more than your initial investment. Opinions, market data, and recommendations are subject to change without notice. Past performance is not necessarily indicative of future results. This report contains research as defined in applicable CFTC regulations. Both RCM Asset Management and the research analyst may have positions in the financial products discussed.




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