Technically Speaking

Monthly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed at $37.60, down $7.01 on the monthly chart. The major (long-term) trend is down as the spot-month contract posted a new low of $35.98. This put the market at its lowest level since July 2004. Monthly stochastics are in single-digits indicating a sharply oversold situation and below the levels seen when the previous bullish crossover was established (16.3%, 12.5%).

Crude Oil: The spot-month contract closed at $37.04, down $4.61 on the monthly chart. The major (long-term) trend is down as the spot-month contract posted a new low of $33.98. This put the market at its lowest price level since February 2009. Monthly stochastics are well below the oversold level of 20%, but above the level of the previous bullish crossover (7.6%, 7.5%) setting the stage for a possible secondary (confirming) crossover signaling a potential change in trend.

Distillates: The spot-month contract closed at $1.1239, down 21.30cts on the monthly chart. The major (long-term) trend is down as the spot-month contract moved to a new low of $1.0704. This put the market at its lowest level since July 2004. Monthly stochastics are in single-digits indicating a sharply oversold situation.

Gasoline: The spot-month contract closed at $1.2710, down 8.77cts on the monthly chart. The major (long-term) trend remains down as the spot-month contract posted a new low of $1.1690. However, the market was able to rally off this low and with monthly stochastics well below the oversold level of 20% could start to build bullish momentum. This could turn the major trend sideways with initial resistance at the September 2015 high of $1.4868.

Ethanol: The spot-month contract closed at $1.400 down 9.0cts on the monthly chart. The major (long-term) trend remains sideways with support at the January 2015 low of $1.292. Resistance is at the May 2015 high of $1.512. Monthly stochastics are neutral-to-bearish near the oversold level of 20%.

Natural Gas: The spot-month contract closed at $2.337, up 10.2cts on the monthly chart. The major (long-term) trend turned with the spot-month contract posting a spike reversal during December. This began with posting a new low of $1.685, the lowest price since March 1999, followed by a rally to a monthly high of $2.387. This led to a bullish crossover by monthly stochastics below the oversold level of 20%, a confirming signal to the crossover seen at the end of April 2015. The initial price target is $2.636, the 23.6% retracement level of the previous major downtrend.

Propane (Conway cash price): Conway propane closed at $0.3338, down 4.12cts on its monthly chart. The major (long-term) trend is sideways with support at the June 2015 low of $0.2675 and resistance at the 4-month high of $0.4700. Monthly stochastics remain below 20% indicating the market is in an oversold situation.

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