Technically Speaking

Weekly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed $1.38 lower at $48.79. Despite the lower close weekly stochastics remain neutral to bullish indicating the secondary (intermediate-term) downtrend has come to an end. The spot-month contract is a long way from establishing a bullish turn signal, with the 4-week high at $60.43. The nearby futures spread saw its contango weaken slightly last week, possibly indicating at least light commercial buying interest near the recent lows of $45.19.

Crude Oil: The spot-month contract closed $3.10 lower at $45.59. Last week's analysis talked of a market that may have reached a point of trader indecision, indicating a possible end to the secondary (intermediate-term) downtrend. However, market action this past week resulted in a bearish close by the spot-month contract near its weekly low of $45.21 and the recent major (long-term) low of $44.20. This close also erased previous bullish signals in weekly stochastics, moving the momentum study back to neutral. Friday's CFTC Commitments of Traders report did show noncommercial traders increasing their net-long futures position by 5,789 contracts due to a decrease in their short futures holdings by 10,745 contracts. The contango in the nearby futures spread continued to strengthen reflecting an increasingly bearish supply and demand situation.

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Distillates: The spot-month contract closed 1.89cts lower at $1.6467. This past week saw the spot-month contract stabilize above its recent low of $1.5890. Weekly stochastics remain bullish following the previous week's establishment of a bullish crossover, though the futures market has not posted a bullish technical signal indicating the secondary (intermediate-term) trend has turned up.

Gasoline: The spot-month contract closed 1.09cts lower at $1.3479. The spot-month contract continues to consolidate above its recent low of $1.2265. This past week saw the market close near the high end of its weekly trading range, indicating momentum could be turning more bullish. Last week's bullish crossover by stochastics reflected a possible shift in market sentiment, indicating the secondary (intermediate-term) downtrend had come to an end.

Ethanol: The spot-month contract closed 7.70cts higher at $1.4300. While the market remains in a secondary (intermediate-term) downtrend, the spot-month contract was able to consolidate above the previous week's low of $1.2920. Weekly stochastics are nearing a bullish crossover below the oversold level of 20%.

Natural Gas: The spot-month contract closed 14.1cts lower at $2.986. The previous week's bullish key reversal remains in effect despite this past week's move to a new low of $2.766. The spot-month contract continues to hold above major (long-term) support at $2.985. Weekly stochastics are below the oversold level of 20% and nearing a possible bullish crossover.

Propane (Conway cash price): Conway propane closed unchanged at $0.4700. Cash propane remains in position to establish bullish technical signals with this past week's high of $0.4825 also the 4-week high. The previous week's bullish crossover by weekly stochastics continues to indicate the secondary (intermediate-term) trend has turned up.

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