Technically Speaking

Weekly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed $2.85 lower at $59.73. Despite the lower close the secondary (intermediate-term) trend remains up with weekly stochastics bullish. The spot-month contract continues to hold below resistance at $62.22, a price that marks the 23.6% retracement level of the previous downtrend from $117.34 through the low of $45.19. Given the uptrend in the spot futures spread (weakening contango), the longer-term price upside price target remains the 38.2% retracement level of $72.75.

Crude Oil: The spot-month contract closed $0.15 lower at $49.61. The secondary trend remains sideways with the spot-month contract holding below resistance at the 4-week high of $54.24 and above the recent low of $43.58. Weekly stochastics are neutral to bullish, nearing a move above the oversold level of 20%. While the nearby futures spread has seen a weakening contango, it still reflects a bearish view of supply and demand. Also, Friday's CFTC Commitments of Traders report showed noncommercial interests reduced their net-long holdings by 7,548 contracts, putting pressure on the market.

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Distillates: The spot-month contract closed 42.99cts lower at $1.8690. While technical signals continue to indicate the secondary (intermediate-term) trend is up, the market readjustment after the expiration of the March futures contract resulted in a test of support at $1.8802. The spot futures spread remains inverted, indicating a bullish supply and demand situation, meaning the spot-month futures contract could once again test resistance between $2.2286 and $2.4261. The previous week's high was $2.3514.

Gasoline: The spot-month contract closed 11.43cts higher at $1.8819. The secondary (intermediate-term) trend remains up. However, the spot-month contract fell back from its test of resistance at $2.0060, a price that marks the 38.2% retracement level of the previous downtrend from $3.2672 through the low of $1.2265. The trend of the spot futures spread is also up (weakening contango), indicating increased support from commercial buying. Friday's weekly CFTC Commitments of Traders report showed noncommercial interests increasing their net-long futures position by 3,575 contracts.

Ethanol: The spot-month contract closed 1.6cts higher at $1.4600. The secondary (intermediate-term) remains sideways as the spot-month contract consolidates between $1.6770 and $1.2920. Weekly stochastics remain neutral to bullish below the oversold level of 20%.

Natural Gas: The spot-month contract closed 10.5cts higher at $2.839. The secondary (intermediate-term) trend may be trying to turn up again, with last week's low of $2.641 forming a potential double-bottom with the previous low of $2.567. Weekly stochastics are also bullish below the oversold level of 20%. Nevertheless, the market has had a difficult time generating continued buying enthusiasm, needing a move above the 4-week high of $3.039 to signal a bullish breakout.

Propane (Conway cash price): Conway propane closed 4.0cts lower at $0.5375. Despite the sell-off seen last week, the secondary (intermediate-term) trend remains up. Initial support is at $0.5159, then $0.4812. These prices mark the 33% and 50% retracement levels of the previous rally from $0.3775 through last week's high of $0.5850.

Last Friday's CFTC Commitments of Traders were report showed positions as of Tuesday, March 3.

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