Energy markets could get rocked this week if Iran ignores the July 12 deadline set by the West to stop uranium enrichment and agree to negotiate on it’s nuclear program or face the threat of U.N. Security Council sanctions. Threats of sanctions will only escalate the war of words between the West and Iran. Ayatolla Ali Khameni, the spiritual leader of Iran has warned that Iran could choke off the Straights of Hormuz through which massive amounts of oil flow.
August crude oil
The market was staging a bull advance on the contract high made May 3rd at $79.10. Although Friday’s rejection from resistance at $75.70 cautions for a short-term reversal. A close below $73.33 is negative for the bull drive higher. A close under $72.27 will encourage sell offs.
August heating oil
Friday’s price action hints at a bear reversal. A move below 19928 will target key support at 18955. A close below 18955 will turn the market to lower levels. The market may struggle to stay above 19928 but only a close above 20555 initiates breakouts.
August unleaded gas
The market is bullish with a close above 2.2700 targeting 2.3500 plus. Price action is indicating a bullish trend with the market making a new high of 2.2794 on July 5. First up side target is 2.3000 with a close below 2.2100 needed to void a bull breakout for this move. A close below support at 2.1800 is needed to initiate stronger sell offs.
August natural gas
The market is bearish and continues to make new lows with a close on Friday at 5515.
Ralph D. Preston III, Heritage West Financial Inc.