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 $1.62 higher at $66.87. Though weekly stochastics continue to show the market is overbought, the major (long-term) trend remains up. With monthly stochastics also above 80% the market could soon run out of bullish momentum long-term, and if so the secondary (intermediate-term) trend could turn down again. For now the market continues to be driven by a bullish forward curve.

Crude Oil: The spot-month contract closed $1.95 higher at $60.42. The spot-month contract extended its secondary (intermediate-term) uptrend through the previous high of $59.05 despite weekly stochastics above 90% indicating a sharply overbought situation. The major (long-term) uptrend continues to drive the secondary trend higher.

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Distillates: The spot-month contract closed 9.87cts higher at $2.0681. Despite weekly stochastics sitting above the sharply overbought level of 90% the market continues to extend its major (long-term) uptrend. Support continues to come from the market's bullish fundamentals, indicated by the backwardation (inverse) in its forward curve.

Gasoline: RBOB gasoline futures market closed 3.35cts higher at $1.7958. The secondary (intermediate-term) trend remains sideways-to-up with resistance at the previous high of $1.8402. Support is at the 4-week low of $1.6438.

Ethanol: The spot-month contract closed 1.4cts higher at $1.320. The secondary (intermediate-term) trend remains up with initial resistance at $1.371. This price marks the 23.6% retracement level of the previous downtrend from $1.760 through the low of $1.251. Weekly stochastics are bullish below the oversold level of 20%.

Natural Gas: The spot-month contract closed 28.6cts higher at $2.953. The market's secondary (intermediate-term) trend remains sideways with support still seen at $2.521. This price marks the 61.8% retracement level of the previous uptrend from $1.611 through the high of $3.994. Resistance is at $3.084, then $3.258.

Propane (Conway cash price): Conway propane closed 2.75cts higher at $0.9275. Despite the higher weekly close the market remains in a secondary (intermediate-term) downtrend. The recent rally looks to be Wave B (second wave) of a 3-wave downtrend with cash propane testing resistance between $0.9000 and $0.9422, prices that mark the 50% and 76.4% retracement levels of Wave A from $0.9800 through the low of $0.8200.

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