Less Pain at the Pump Ahead?

Today’s Spotlight Market
While RBOB Gasoline futures prices continue to tumble, large traders are increasing their net-long position according to the most recent Commitment of Traders report. Non-commercial traders, normally commodity and hedge funds, added 4,688 new net-long positions for the reporting period ending August 12th. This increased the overall net-long position to 52,900 contracts. Non-reportable traders are rather neutral on the prospects for Gasoline, holding an overall net position of short 48 contracts. Commercial traders have added to their net-short position last week, which now totals 52,852 contracts. ?

 

Fundamentals
U.S. consumers have received some good news this summer with Gasoline prices heading lower as we approach the upcoming Labor Day Holiday weekend. Average retail Gasoline prices have fallen below $3.50 per gallon in the U.S. despite political turmoil in both Ukraine and Iraq. Lower Crude Oil prices continue to account for the bulk of the declines in Gasoline prices as over two-thirds of the price of gasoline is derived from the price of Crude Oil. Not even refinery outages in Texas and Kansas has curtailed the bearish trend for Gasoline as production continues to surpass demand, despite the recent refinery outages. The Energy Information Administration (EIA) reported that Gasoline demand averaged 9.02 million barrels per day for the 4-week period ending August 8, while inventories climbed to their highest levels since March at 218.2 million barrels. With the ?official? end to the summer driving season, less than 2 weeks away, Gasoline prices will need some outside catalysts to generate some support for prices and put a halt to the bearish trend.

Technical Notes? -? View Today’s Chart
Looking at the daily chart for October RBOB, we notice prices have been in a steady downtrend since late June, with only a brief pause in mid-July. An unsuccessful test of the 200-day moving average, capped an attempted short-covering rally with prices now hovering near year to date lows. The 14-day RSI is skirting just above oversold levels with a current reading of 37.28. Monday?s low of 2.5186 is seen as near-term support for the October futures, with resistance found at the August 8 high of 2.6634.?

WednesdayAG20

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