Interpreting market movements in a whole new way
Interpreting market movements in a whole new way
Gasoline futures customarily never trade in a vacuum always aligning with the price of WTI Crude unless we are during periods of refinery maintenance. This post is related to a trade idea related to gasoline futures and while other distillates such as heating oil have provided better opportunities following the weather conditions, there is a move here that we would like to present which would be better if traded in simulation mode especially if you are new to energy futures trading.
Oil prices have remained in the lower 70s despite the chaos in the Red Sea channel where most tankers make their way out of into European ports. OPEC has been trying to band together support to bring about additional cuts without much success and meanwhile we have news of flattening sales of EVs in the US and fleet operators like Hertz opting for gasoline powered vehicles. These catalysts should provide some support for oil in the short term. Worldwide consumption of crude oil averaged 101.1 million bpd in 2023, narrowly beating the pre-pandemic record of 101.0 million bpd in 2019, according to the EIA. Petroleum producers meanwhile are likely to be able to satisfy growth on the forecast scale without putting too much upward pressure on prices. We present charts of WTI Crude and Gasoline futures along with a short-term trade idea:
WTI holding between 71.10~72.41 near term can see prices shoot back up to 75.75. US RBoB [gasoline] futures meanwhile holding between 2.081~2.115 can see 2.2045 as a potential price target. Both instruments refer to February expiration futures.
Chart of Feb'24 expiration WTI Crude @CLG24
Chart of February '24 Gasoline futures @RBG24
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