Technically Speaking

Weekly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed $6.31 lower at $50.11. The spot-month contract posted a new low of $48.90 last week, with next major (long-term) support at the December 2008 low of $36.20. Pressure continues to come from a more bearish supply and demand situation, as indicated by the strengthening contango (carry) in the market's forward curve.

Crude Oil: The spot-month contract closed $4.33 lower at $48.36. The secondary (intermediate-term) trend remains down as the spot-month contract posted a new low of $46.83 last week. Next major (long-term) support is pegged at the December 2008 low of $32.48. The strong downtrend (strengthening contango/carry) in the market's futures spreads (see attached chart) continues to indicate an increasingly bearish supply and demand situation.

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Distillates: The spot-month contract closed 9.27cts lower at $1.7030. The secondary (intermediate-term) trend remains down as the spot-month contract posted a new low of $1.6715. Next major (long-term) support is pegged at $1.6550, a price that marks the 76.4% retracement level of the previous major uptrend from $1.1252 through the high of $3.3700.

Gasoline: The spot-month contract closed 11.02cts lower at $1.3232. The secondary (intermediate-term) remains down with the spot-month contract posting a new low of $1.2936. Next major support is at the December 2008 low of $0.7850.

Natural Gas: The spot-month contract closed 5.7cts lower at $2.946. The secondary (intermediate-term) trend remains down despite the spot-month contract posting an inside week last week. The spot-month is priced just below major (long-term) support at $2.985, the 76.4% retracement level of the previous uptrend from $1.902 through the high of $6.493. Monthly stochastics are below 20% indicating the market is long-term oversold.

Propane (Conway cash price): Conway propane closed 0.37ct lower at $0.4063. The lower close after posting a new low of $0.3775 indicates the cash propane market remains in a secondary (intermediate-term) downtrend. However, the close was near the week's high of $0.4125 putting cash propane in position to establish an island bottom with a gap higher next week. Weekly stochastics are in single digits, indicating a sharply oversold market, nearing a bullish crossover that would indicate a potential change in trend.

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