Technically Speaking

Monthly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed at $69.05, up $2.18 on the monthly chart. While the market remains in a major (long-term) uptrend, it looks to be stalling. Monthly stochastics are above 90% indicating a sharply overbought situation. A lower move in February could establish a bearish crossover, signaling the end of the uptrend. However, the market's bullish forward curve continues to provide support with next resistance up at $77.75.

Crude Oil: The spot-month contract closed at $64.73, up $4.31 on the monthly chart. The market remains in a major (long-term) uptrend, though monthly stochastics are near 90% and threatening a bearish crossover if WTI moves lower in February. Like Brent crude, the market continues to be supported by its bullish forward curve. Next resistance is pegged at $70.44, the 50% retracement level of the previous major downtrend.

Distillates: The spot-month contract closed at $2.0692, down 0.63ct on the monthly chart. Distillates came close to establishing a bearish crossover by monthly stochastics above the overbought level of 80% at the end of January. This puts the market, with the spot-month contract holding below resistance at $2.1095, in position to establish a top in its major (long-term) uptrend during February.

Gasoline: The spot-month contract closed at $1.9075, up 10.83 cents on the monthly chart. The major (long-term) trend of the futures market remains up with the spot-month contract above resistance at $1.8836. This price marks the 38.2% retracement level of the previous downtrend from $3.4789 through the low of $0.8975.

Ethanol: The spot-month contract closed at $1.390, up 7.0cts on the monthly chart. The major (long-term) trend looks to be in the process of turning up. However, the rally off December's low of $1.251 led to a bullish crossover by monthly stochastics, but at or slightly above the oversold level of 20%. Therefore the market will need to see a new 4-month high to confirm a major uptrend, or a sell-off taking stochastics back below 20%.

Natural Gas: The spot-month contract closed at $2.995, up 4.2cts on the monthly chart. The market remains in a wide-ranging major (long-term) sideways trend with support still at $2.521. Monthly stochastics are still neutral-to-bearish.

Propane (Conway cash price): Conway propane closed at $0.7975, down 13.00cts on its monthly chart. The market returned to its major (long-term) downtrend in January as it posted a bearish outside range. Initial support is pegged at $0.7377, a price that marks the 33% retracement level of the previous major uptrend from $0.2525 through the November 2017 high of $0.9800. The 50% retracement level is down at $0.6162.

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