Energy Markets Experience Corrective Trading

Strategic Insights -

The energy markets on the New York Mercantile Exchange (Nymex) experienced a day of corrective trading on Monday, with futures contracts for gasoline, crude oil, and heating oil experiencing declines. Analysts predicted several days of continued corrective trading, which was triggered by a rally in gasoline prices last week. The correction in the energy complex was led by gasoline futures, which settled down 0.79 cents on Nymex at 57.44 cents/gallon for the May delivery contract. Trading on the cash market followed a similar trend, with prices softening almost 2 cents/gallon in the New York Harbor area.

Key Takeaways:

  • Gasoline futures contracts on Nymex settled down 0.79 cents to 57.44 cents/gallon for the May delivery contract.
  • Analyst Victor Yu predicted that the May gasoline contract has the potential to move down to 56.5 cents/gallon or 55.85 cents before another rally.
  • The American Petroleum Institute numbers coming out on Tuesday night are expected to impact the energy complex.
  • Crude contracts on Nymex weakened, correcting downward to test support levels of $19/bbl, and settling down 14 cents at $19.03.
  • Spot-market price of West Texas Intermediate (WTI) crude at Cushing, Okla., fell 24 cents to average $18.94/bbl.
  • Spot Brent crude on London's International Petroleum Exchange fell 20 cents to an average $17.65.
  • Heating oil contracts on Nymex trailed the rest of the sector in the correction, with the May contract settling down 0.13 cents at 47.47 cents/gallon.

Statistics:

  • Gasoline futures contracts on Nymex settled down 0.79 cents to 57.44 cents/gallon for the May delivery contract.
  • Crude contracts on Nymex weakened, correcting downward to test support levels of $19/bbl.
  • Spot-market price of West Texas Intermediate (WTI) crude at Cushing, Okla., fell 24 cents to average $18.94/bbl.
  • Spot Brent crude on London's International Petroleum Exchange fell 20 cents to an average $17.65.
  • Heating oil contracts on Nymex trailed the rest of the sector in the correction, with the May contract settling down 0.13 cents at 47.47 cents/gallon.

Sources:

  • "It was a correction day for gasoline after its rally last week, and that pressured the rest of the energy complex," said Victor Yu, an analyst with Refco Inc. (Source: No specific date mentioned, Nymex trading on Monday)
  • "The May gasoline contract has the potential to move down to 56.5 cents/gallon or 55.85 cents before another rally," Yu said. (Source: No specific date mentioned, Nymex trading on Monday)
  • "Iraq will only sell oil if they can do it on their own terms, so I don't consider the proposal a concern," one Houston-based trader said. (Source: No specific date mentioned, Nymex trading on Monday)