Technically Speaking

Weekly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed $0.09 lower at $55.90. The market remains in a secondary (intermediate-term) sideways trend between the high of $58.37 (week of January 3) and low of $53.58 (week of January 9). Weekly stochastics remain bearish above the overbought level of 80%, indicating the next move should be toward the downside. Monthly stochastics are also well above the overbought level of 80%.

Crude Oil: The spot-month contract closed $0.66 lower at $53.33. Similar to Brent, WTI is in a secondary (intermediate-term) sideways trend between the high of $55.24 (week of January 3) and low of $50.71 (week of January 9). This creates a range of $4.53. Weekly and monthly stochastics remain in overbought territory above 80%, with major (long-term) resistance at $55.61 continuing to hold.

Distillates: The spot-month contract closed 4.68cts lower at $1.5936. The secondary (intermediate-term) trend is down as the spot-month contract moved to a new 4-week low of $1.5741. Initial support is at $1.5485, a price that marks the 23.6% retracement level of the previous uptrend from $0.8487 through the high of $1.7647. Given continued bearish weekly stochastics, the market could test the 38.2% retracement level of $1.4148.

Gasoline: Chicago cash gasoline closed 1.83cts higher at $1.5331. This analysis has shifted to the cash market due to skewed charts following the expiration of the March and roll to the May as spot-futures with a 20-cent contango. Cash RBOB remains in a secondary (intermediate-term) consolation pattern between roughly $1.7625 and $1.3271, prices that mark the 23.6% and 50% retracement levels of the previous uptrend from $0.5025 through the high of $2.1517.

Ethanol: The spot-month contract closed 1.0ct higher at $1.514. The secondary (intermediate-term) remains sideways. Resistance is at the 4-week high of $1.612 while support is at the recent low of $1.425.

Natural Gas: The spot-month contract closed 20.0cts higher at $2.827. Despite the higher weekly close the secondary (intermediate-term) trend remains down. The spot-month contract continued to rally off its test of support at $2.521, a price that marks the 61.8% retracement level of the previous uptrend from $1.611 through the high of $3.994. Given continued bearish weekly stochastics, look for the spot-month contract to retest this support.

Propane (Conway cash price): Conway propane closed 2.62cts lower at $0.5513. The secondary (intermediate-term) trend remains down with next support pegged at $0.5281. This price marks the 67% retracement level of the previous uptrend from $0.3775 through the high $0.9100. Below that support is at the 76.4% retracement level of $0.4726. Weekly stochastics remain bearish above the oversold level of 20% indicating the market has room to continue its sell-off.

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