Oil may see top at $95.40 despite Hurricane Isaac

Daily Market Analysis (SHORT TERM) Wednesday 08/29/2012


KEY TERMS

OVB       Outside Vertical Bar
VRCB    Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (October):

  • Short Term Trends are bullish.
  • Confirmation of a top with a range violation on 08/27/12 @ 112.99. Confirmation of a top with a close violation on 08/27/12 @ 112.26. Downside Target = 107.40 – 106.24.
  • Inside VRCB generated on Tuesday.
  • October Brent Crude settled back higher on Tuesday while failing to violate Monday’s EROVB (Extended Range Outside Vertical Bar) low of 111.56 as indecision from traders regarding the SPR and Hurricane Isaac effects left the market mostly range bound.
  • Monday’s bearish OVB still suggest that this market should break to new lows for the week on Wednesday however supply disruptions around the globe may lead to a draw in crude inventories and push Brent higher depending on the 9:30 CST EIA storage report.
  • Projected Daily Range: 2.54
  • Projected Weekly Range: 4.32
  • Projected Monthly Range: 13.99

WTI Crude Oil (October):

  • Short Term Trends are bullish.
  • Confirmation of a top with a range violation on 08/27/12 @ 95.40. Confirmation of a bottom with a close violation on 08/15/12 @ 94.33. Downside Targets = 89.82 – 88.74.
  • Inside compression day generated on Tuesday. Possible confirmation of a top with a close @ $95.40 or lower.
  • October WTI Crude remained stronger again in relation to Brent pricing on Tuesday by posting a solid gain on the day and closing in the upper 85% of the daily trading range.
  • With SPR releases less likely because of the relatively minor impacts of the smaller hurricane, WTI could see solid gains on Wednesday as the storm reaches the mainland. Supply disruptions could push the market back near the weekly highs after Wednesday’s EIA storage numbers are released.
  • Projected Daily Range: 2.15
  • Projected Weekly Range: 3.76
  • Projected Monthly Range: 11.71

Natural Gas (October):

  • Short Term Trend is bearish.
  • Confirmation of a top with a range violation on 08/27/2012 @ 2.721. Confirmation of a top with a close violation on 08/02/2012 @ 2.979. Downside Targets = 2.612 – 2.563.
  • New lows made on current move Tuesday @ 2.624. Downside Targets 95% achieved.
  • October Natural Gas traded through the downside monthly price objective on Tuesday on its fourth straight day of declines as it looks to break below the daily Support Bollinger Band for the first time since April 11.
  • The next downside targets for natural gas should be $2.612 (the downside monthly objective on spot pricing) followed by $2.563 (Q3 initial projected low).
  • Projected Daily Range: .126
  • Projected Weekly Range: .239
  • Projected Monthly Range: .629

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