Technically Speaking

Monthly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed at $65.56, down $1.22 on the monthly chart. Despite the lower monthly close the major (long-term) trend remains up. However, the spot-month contract continues to find selling interest near initial resistance at $64.83, a price that marks the 23.6% retracement level of the downtrend from $128.40 (March 2012 high) through $45.19 (January 2015 low). Next resistance is at the 33% retracement level of $72.90. The lower monthly close could lead to continued selling in June, pulling monthly stochastics back below the oversold level of 20%.

Crude Oil: The spot-month contract closed at $60.30, up $0.67 on the monthly chart. The major (long-term) trend remains up with the spot-month contract testing resistance between $59.21 and $66.27. These prices mark the 23.6% and 33% retracement levels of the previous downtrend from $114.83 (May 2011 high) through $42.03 (low from March 2015). Monthly stochastics remain bullish following the crossover below the oversold level of 20% posted at the end of April.

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Distillates: The spot-month contract closed at $1.9497, down 2.66cts on the monthly chart. Despite the lower close the major (long-term) trend remains up with resistance pegged at $2.1821. This price marks the 33% retracement level of the previous downtrend from $3.3700 (January 2014 high) through $1.5890 (January 2015 low).

Gasoline: The spot-month contract closed at $2.0627, up 1.30cts on the monthly chart. The major (long-term) trend of the market remains up with the spot-month contract testing resistance at $2.0869. This price marks the 38.2% retracement level of the previous downtrend from $3.4789 (April 2011 high) through $1.2265 (January 2015 low). The strengthening backwardation in the market's forward curve would suggest an extended rally to the 50% retracement level of $2.3527. However, CFTC Commitments of Traders reports showed noncommercial interests continuing to reduce their net-long futures holdings during May.

Ethanol: The spot-month contract closed at $1.533, down 8.6cts on the monthly chart. The sharp sell-off in May looks to have turned the major (long-term) trend sideways with support at $1.292 (January 2015 low) and resistance at $1.712, the 23.6% retracement level of the downtrend from $3.07 (July 2011 high) through the $1.292 low. Weekly stochastics turned neutral below the oversold level of 20%.

Natural Gas: The spot-month contract closed at $2.642, down 10.9cts on the monthly chart. Indications are that the major (long-term) trend remains up. However the sell-off by the spot-month contract after testing resistance at $3.216, a price that marks the 23.6% retracement level of the downtrend from $5.72 (January 2014 high) through $2.443 (April 2015 low), could lead to a period of consolidation. Monthly stochastics remain in single digits showing a sharply oversold situation that could lead to renewed buying interest.

Propane (Conway cash price): Conway propane closed at $0.3800, down 9.50cts on its monthly chart. While the market posted a new low of $0.3175 during May, the rally at the end of the month led to a bullish crossover by monthly stochastics well below the oversold level of 20%. This could be an indication that the major (long-term) trend has turned sideways, and possibly up. Initial resistance is at $0.5924, a price that marks the 23.6% retracement level of the previous downtrend from $1.4825 (December 2013 high) through the May low.

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