Oil eyes $100 as U.S. dollar remains weak

Daily Market Analysis (SHORT TERM) Thursday 01/31/2013


KEY TERMS

OVB       Outside Vertical Bar
VRCB    Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (March ‘13):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 01/15/13 @ 111.23. Confirmation of a bottom with a close violation on 12/12/12 @ 107.17. Upside Targets = 117.89 – 121.21.
  • New highs made on current move Wednesday @ 115.24.
  • March Brent Crude pushed higher again on Wednesday to make new five-month highs while closing outside the daily RBB for the second consecutive day.
  • With a steadily declining USD, risk assets such as Brent should continue to rise over the intermediate term and move higher before reaching my longstanding IT objective of $121.21.
  • Projected Daily Range: 1.26
  • Projected Weekly Range: 3.50
  • Projected Monthly Range: 7.54

WTI Crude Oil (March ‘13):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 01/08/13 @ 93.36. Confirmation of a bottom with a close violation on 12/18/12 @ 88.40. Upside Targets = 96.36 – 97.57.
  • New highs made on current move Wednesday @ 98.24.
  • March WTI Crude Oil continued higher on Wednesday despite a large supply injection at Cushing while closing outside the daily RBB as it attempts to track down the $100 threshold.
  • While WTI experienced a range reduction on Wednesday and increasing its oversold status, it will require significant strength from the USD to put a halt to the nearly two months of sustained momentum WTI has established.
  • Projected Daily Range: 1.41
  • Projected Weekly Range: 3.29
  • Projected Monthly Range: 7.18

Natural Gas (March ‘13):

  • Short Term trend is bearish.
  • Confirmation of a top with a range violation on 01/24/2013 @ 3.501 Confirmation of a top with a close violation on 01/14/2013 @ 3.454. Downside Targets = 3.415 – 3.379.
  • C > HOLB generated on Wednesday. Possible confirmation of a bottom with a range violation @ 3.345. Possible confirmation of a bottom with a close violation @ 3.345 or higher.
  • March Natural Gas rallied higher on Wednesday after leaving a slight close gap in the market from Tuesday ahead of what may be the largest storage withdrawal of the season and a volatility rally as mentioned in Tuesday evening’s report.
  • After a modest dip to begin Thursday’s session, expect extremely volatile trading with a strong possibility of the weekly close gap left at $3.463 being filled with a 200+ pull.
  • Projected Daily Range: .094
  • Projected Weekly Range: .250
  • Projected Monthly Range: .492

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