Carl Larry: "It's Drawdown Time For Energy"

Despite all the recent, we’re still stuck in neutral. RSI didn’t even make it up to overbought territory (>70), but here we are today just under neutral. No real happy thoughts on direction, but that doesn’t mean we can’t color between the lines. This give us a chance to retest resistance levels at 9465, 9588 and 9691. We can also turn right back down to find support at 9271, 9191 and 9086. The front spread plays like the flat price and grinds between –32 and –29. Hard to find a good reason to see that spread breakout anytime soon, but roll is ahead. Flat price higher today, but nothing out of the ordinary.



Gasoline: RBK3 it is. If anyone is wondering why RB is getting so much volume - it’s the only one with direction. We target new support down to 28786, 28502 and 28366. The upside looks for resistance at 29021, 29179 and 29493. The front spread is showing some life, looking above to 60, 88 and 102. Support gets to 38, 25, 09. RBCL has 2877, 2925 above and 2750, 2689 below.

Distillate: HOK3 here. The chart has had a solid move lower, but we are waiting to see if this bounce holds. We look for support to hold 29200, 29069 and 28895. Upside seeks resistance at 29430, 29518, 29704. The front spread heading higher to test resistance at 69, 83 and 101. Support finds 39, 22 and 12. The HOCL finds resistance at 3060, 3098. Support hold down to 2962, 2926.

Trends are only for the affected: We’re still flat as a board on the 10min chart and it doesn’t seem like we’re going anywhere soon. This recent move keeps us within a range of 9200 to 9400. It may seem wide, but considering the lack of direction, we can’t expect much. The 60min chart has a clearer picture of the correction, but the next move here is to test the resistance in the 9475 area. That only brings us to a new sideways trading range, but at least it’s something different.

Fundy you should mention: Not sure how we’re going to make up for the lost cause that was Friday's unemployment numbers, but it’s a new week. Not sure anyone has noticed, but the econ numbers that are based on a total day calendar, have shifted a few of the data points. We saw the earliest Easter this past month, and that has played around a little with the numbers. Or even this week. Normally we see PPI and CPI the same week, but because of the general accounting of these numbers, we get CPI the following week. Even Retail Sales, which are normally a Thursday thing are out on Friday. Nice job fooling with Daylight Savings.

Sorry, I am just physically attracted: Why am I the only one noticing that the more refinery utilization goes up in the U.S., the less gas and distillates we keep building. It’s should be counterintuitive, but it isn’t. We increased runs to over 15M b/d last week, and drew nearly 3M barrels between gasoline and distillates. That’s as good as dropping the unemployment rate without hardly adding any new jobs. Somehow Big Guv is creating a wormhole where these things end up going. We can watch closely again this week for some clarity, but as long as we keep increasing distillate production and seeing a stable amount of gas demand, we’re going to finally increase our imports. We’ll start with Europe’s overhang of gasoline.