Technically Speaking

Weekly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed $1.42 higher at $66.81. Last week saw the spot-month contract consolidate within the previous week's trading range while weekly stochastics continue to show a bearish crossover. Resistance remains at $69.22, a price that marks the 33% retracement level of the previous downtrend from $117.34 through the low of $45.19. Next resistance is the 38.2% retracement level of $69.22.

Crude Oil: The spot-month contract closed $0.30 higher at $59.69. The secondary (intermediate-term) trend remains up, though weekly stochastics are above the overbought level of 80% and nearing a bearish crossover. The spot-month contract held above resistance at $58.60, a price that marks the 23.6% retracement level of the previous downtrend from $112.24 through the low of $42.03. However, it continues to consolidate rather than showing signs of extending the uptrend toward next resistance at the 33% retracement level of $65.41.

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Distillates: The spot-month contract closed 5.11cts higher at $20048. The secondary (intermediate-term) trend remains up with the spot-month contract closing above resistance at $1.9841. This price marks the 23.6% retracement level of the previous downtrend from $3.2633 through the low of $1.5890. Support continues to come from the commercial side of the market, as indicated by the uptrend (weakening contango) in the market's futures spreads. With weekly stochastics still neutral-to-bullish the spot-month contract could extend the uptrend to test the 33% retracement level of $2.1465, if not the 38.2% retracement level of $2.2286.

Gasoline: The spot-month contract closed 6.50cts higher at $2.0568. The market looks to have reestablished its secondary (intermediate-term) uptrend with last week's high close. However, weekly stochastics remain well above the overbought level of 80% meaning it could be more difficult for the market to extend its uptrend to next resistance at $2.1892. This price marks the 50% retracement level of the previous downtrend from $3.1520 through the low of $1.2265. Complicating things further, Friday's CFTC Commitments of traders report showed noncommercial interests reducing their net-long futures position by 2,529 contracts.

Ethanol: The spot-month contract closed 2.1cts higher at $1.6800. The secondary (intermediate-term) remains up as the spot-month contract closing above technical resistance at $1.6637. This price marks the 38.2% retracement level of the previous downtrend from $2.2650 through the low of $1.2920. Given that the forward curve remains inverted, reflecting a bullish commercial outlook, the spot-month could look to test the 50% retracement level up at $1.7785. However, weekly stochastics are already well above the overbought level of 80%, meaning it could become increasingly difficult for the market to extend its uptrend.

Natural Gas: The spot-month contract closed 13.6cts higher at $3.016. The secondary (intermediate-term) trend is up. Initial resistance is pegged at $3.39, a price that marks the 23.6% retracement level of the previous downtrend from $6.493 through last week's low of $2.443. A test of this resistance would also be a test of the lower end of a bearish price gap ($3.351) left the week of December 22, 2014. Weekly stochastics remain bullish.

Propane (Conway cash price): Conway propane closed 0.63cts higher at $0.4313. The secondary (intermediate-term) trend remains sideways. Support is at $0.3775, the previous low from the week of January 5, 2015.

The weekly Commitments of Traders report showed positions held as of Tuesday, May 12.

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