Technically Speaking

Weekly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed $2.76 lower at $45.37. The secondary (intermediate-term) trend looks to be rolling into a downtrend following a bearish crossover by weekly stochastics above the overbought level of 80%. The spot-month contract is between resistance at $43.35 and $48.36, prices that mark the 38.2% and 50% retracement levels of the previous downtrend from $69.63 through the low of $27.10. Initial support is at the 4-week low of $40.10.

Crude Oil: The spot-month contract closed $1.26 lower at $44.66. Though technical indicators continue to show the secondary (intermediate-term) trend remains up, the market could soon roll into a downtrend. The spot-month contract is testing resistance between $44.31 and $48.63, prices that mark the 50% and 61.8% retracement levels of the previous downtrend from $62.58 through the low of $26.05, while weekly stochastics work toward a bearish crossover above 90%. Friday's CFTC Commitments of Traders report* showed noncommercial interests reducing their net-long futures holdings by 15,721 contracts. On the other hand, the contango in the spot futures spread continues to weaken indicating seasonal commercial support.

Distillates: The spot-month contract closed unchanged at $1.3373. The secondary (intermediate-term) trend looks ready to turn down following a bearish crossover by weekly stochastics above the oversold level of 80%. Resistance at $1.4185, a price that marks the 23.6% retracement level of the previous downtrend from $3.2633 through the low of $0.8487, appears to have held the recent uptrend to a peak of $1.4125 the week of April 26.

Gasoline: The spot-month contract closed 8.86cts lower at $1.4962. The secondary (intermediate-term) trend has turned down. Weekly stochastics posted a bearish crossover above the overbought level of 80%, following the recent test of resistance at $1.6482. This price marks the 33% retracement level of the previous downtrend from $3.1520 through the low of $0.8975. Initial support is pegged at $1.3731, the 33% retracement level of the recently concluded uptrend from the major low through last week's high of $1.6105.

Ethanol: The spot-month contract closed 3.3cts lower at $1.512. The secondary (intermediate-term) trend remains down with the spot-month contract testing initial support at $1.492. This price marks the 33% retracement level of the previous uptrend from $1.296 through last week's spike high of $1.590. The 50% retracement level is down at $1.443.

Natural Gas: The spot-month contract closed 7.7cts lower at $2.101. The secondary (intermediate-term) trend remains up with the spot-month contract slowly making its way toward initial resistance at $2.495. This price marks the 2016 high posted the week of January 4.

Propane (Conway cash price): Conway propane closed 0.25ct lower at $0.4625. The secondary (intermediate-term) trend remains up, though cash propane looks to be nearing a potential top. Initial resistance is at its recent high of $0.4763 while weekly stochastics near another bearish crossover above the overbought level of 80%. Major (long-term) resistance is up at $0.5428.

*The weekly Commitments of Traders report showed positions held as of Tuesday, May 3.

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