U.S. Dollar Strength Remains a Major Factor in Energy Pricing Weakness

Energy prices continue to struggle and it is reflected in the term structure, or cash relative to the futures contract. From the NYMEX trading floor, Jeff Grossman of BRG Brokerage tells TheStreet’s Jill Malandrino that the strength of the U.S. dollar is certainly bearish for prices. In fact, it is putting pressure on just about every commodity across the board. Grossman points out that as the third quarter was winding down, gasoline, the leader in the energy complex, had a dramatic move up, bringing crude along to about the mid-$90s. Unfortunately, as the quarter closed on September 30, those gains were erased and appear to be a bit overdone. Longer term, Grossman is still cautious in taking a position as a trader because things change so quickly. Geopolitical events have no bearing on supply and demand, and the big swings could be painful even if you are dead right. Finally, natural gas is still a wild card as we are in the middle of hurricane season and it is still too early to establish winter weather patterns. As of now, traders are buying the upside calls and looking for a disruption.

undefined