Technically Speaking

Weekly Analysis: Energy Markets

Darin Newsom
By  Darin Newsom , DTN Senior Analyst
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Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed $1.13 higher at $48.60. The secondary (intermediate-term) trend is sideways-to-up with the most recent technical signals bullish. Still, the spot-month contract continues to consolidate between resistance at the recent high of $54.32 and recent low of $42.23 creating a range of $12.09.

Crude Oil: The spot-month contract closed $1.02 higher at $45.70. The secondary (intermediate-term) trend is up though the spot-month contract has been in a minor (short-term) bullish pennant consolidation pattern. Given the range of the initial flagpole of $6.43 ($42.90 to the high of $49.33) a breakout above trendline resistance this week at $43.97 would project a high for the second-half of the flagpole at $50.40. This would also be a test of retracement resistance at $50.16, the 50% level of the downtrend from $62.58 through the low of $37.75.

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Distillates: The spot-month contract closed 3.18cts higher at $1.5225. The spot-month contract posted a bullish outside week, a confirming signal to the bullish reversal seen the week of August 24 and the corresponding bullish crossover by weekly stochastics. This would indicate the market is ready to move into a stronger secondary (intermediate-term) uptrend.

Gasoline: The spot-month contract closed 3.97cts higher at $1.3959. Weekly stochastics established a bullish crossover below 20%, indicating the secondary (intermediate-term) downtrend has ended. The spot-month contract could now consolidate for a couple of weeks before posting a new 4-week high, indicating an uptrend.

Ethanol: The spot-month contract closed 0.07ct lower at $1.530. The spot-month contract posted a bearish reversal on its weekly chart, establishing conflicting technical signals. Most secondary (intermediate-term) indicators and price patterns remain bullish indicating the trend is up. It's possible last week's outside range and lower close, both by fractions of a cent, were anomalies but this market needs to be watched for a minor (short-term) downturn.

Natural Gas: The spot-month contract closed 4.1cts lower at $2.564. The secondary (intermediate-term) trend remains sideways-to-down with support at the major (long-term) low of $2.443 from April 2015. Weekly stochastics remain neutral-to-bearish, working back toward the oversold level of 20%.

Propane (Conway cash price): Conway propane closed 3.37cts higher at $0.4575. While the secondary (intermediate-term) trend remains up, weekly stochastics have moved into overbought territory with the cash price still well below its major (long-term) target of $0.5542. This price marks the 23.6% retracement level of the previous downtrend from the high of $1.4825 through the low of $0.2675.

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