Technically Speaking
Darin Newsom DTN Senior Analyst

Saturday 08/02/14

Energy Markets: Weekly Analysis

Brent Crude Oil: The spot-month contract closed $3.55 lower. The secondary (intermediate-term) trend remains down. The spot-month contract closed near support at $104.62, a price that marks the 61.8% retracement level of the previous uptrend from $96.75 through the high of $117.34. Weekly stochastics are bearish, and approaching the oversold level of 20%. Also, the contango in the nearby futures spread continues to strengthen indicating a more bearish view of market fundamentals.

Source: DTN ProphetX

Crude Oil: The spot-month contract closed $4.21 lower. The secondary (intermediate-term) trend is down. The spot-month contract closed near support at $97.54, a price that marks the 61.8% retracement level of the rally from $91.24 through the high of $112.24. Weekly stochastics remain bearish and are moving toward the oversold level of 20%. The nearby futures spread has seen its backwardation weaken indicating a less bullish view of market fundamentals.

Distillates: The spot-month contract closed 4.96cts lower. The secondary (intermediate-term) trend remains sideways. The spot-month contract is in position to test longer-term support at the low of $2.8285 from the week of November 4, 2013. Weekly stochastics remain neutral to bearish, holding just above the oversold 20% level. The nearby futures spread has seen its contango weaken of late, reflecting a less bearish view of market fundamentals.

Gasoline: The spot-month contract closed 12.10cts lower. The secondary (intermediate-term) trend is down. The spot-month contract is testing support at $2.7457, a price that marks the 61.8% retracement level of the rally from $2.4945 through the high of $3.1520. Weekly stochastics are below the oversold level of 20% indicating selling interest could begin to slow. Friday's weekly CFTC Commitments of Traders report (positions as of Tuesday, July 29) showed noncommercial traders reducing their net-long futures position by 1,741 contracts.

Natural Gas: The spot-month contract closed 1.7cts higher. At first glance, the weekly chart looks to have established a bullish key reversal last week. However, the spot-month contract did not trade above the previous week's high of $3.893, peaking at $3.89. This leaves the secondary (intermediate-term) trend down, though it could start to move sideways given weekly stochastics are below the oversold level of 20%. Also, the market is in position to establish an island-bottom formation, needing a breakaway gap to the upside to go along with the possible exhaustion gap left the week of July 21.

Posted at 6:58AM CDT 08/02/14 by Darin Newsom
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