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 $1.45 higher at $63.52. Despite weekly stochastics above 90% indicating a sharply overbought situation, the market remains in a secondary (intermediate-term) uptrend. Next major (long-term) resistance is at $65.80, a price that marks the 38.2% retracement level of the previous major downtrend from $128.40 through the low of $27.10.

Crude Oil: The spot-month contract closed $1.10 higher at $56.74. Despite weekly stochastics above 90% indicating a sharply overbought situation, the market remains in a secondary (intermediate-term) uptrend. The spot-month contract is testing major (long-term) resistance between $55.61 and $59.95, price that mark the 33% and 38.2% retracement levels of the previous major downtrend from $114.83 through the low of $26.05.

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Distillates: The spot-month contract closed 4.83cts higher at $1.9349. The market continues to show secondary (intermediate-term) and major (long-term) uptrends on its weekly and monthly charts. Next major resistance is at $2.1094, a price that marks the 50% retracement level of the previous downtrend from $3.3700 (January 2014) through the low of $0.8487 (January 2016). However, weekly stochastics are above 90% indicating a sharply overbought situation.

Gasoline: RBOB gasoline futures market closed 1.90cts higher at $1.8124. The secondary (intermediate-term) trend remains up with last week's high of $1.8402 a new 4-week high. Channel resistance is calculated this week at $1.8415.

Ethanol: The spot-month contract closed 3.6cts higher at $1.456. The secondary (intermediate-term) trend looks to have turned up last week as the nearby futures contract posted a new 4-week high of $1.496. However, the strength of the rally pulled the faster moving stochastics above the oversold level of 20% at the end of the week, meaning the bullish crossover wasn't technically below that level. This leaves the door open for a possible pullback if the market fails to rebuild bullish momentum this coming week.

Natural Gas: The spot-month contract closed 22.9cts higher at $3.213. The secondary (intermediate-term) trend is sideways-to-up with next resistance at $3.258, then $3.432.

Propane (Conway cash price): Conway propane closed 0.75ct lower at $0.9125. The market's secondary (intermediate-term) trend could be considered sideways as cash propane consolidates below its recent high of $0.9375. In initial support is at the 4-week low of $0.8500. Weekly stochastics remain above 90%, indicating a sharply overbought situation.

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