Oil falls as indicators show oversold after storage report

KEY TERMS

OVB      Outside Vertical Bar
VRCB   Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (June ‘13):

• Short Term Trend is bearish.
• Confirmation of a top with a range violation on 05/01/13 @ 101.34. Confirmation of a top with a close violation on 05/01/13 @ 99.95. Downside Targets = 96.63 – 94.79.
• June Brent Crude dropped sharply lower on Wednesday following a huge domestic storage injection that put enormous pressure on the market until late in the session when the FOMC meeting announcement was released stating that the Fed stood ready for accommodative action.
• Although Brent was able to rally significantly off the daily lows it still generated a weekly outside reversal pattern and should additional pressure be place on the market heading into the weekend, traders can expect another week of lower prices.
• Projected Daily Range: 2.06
• Projected Weekly Range: 5.34
• Projected Monthly Range: 9.28

WTI Crude Oil (June ‘13):

• Short Term Trend is bearish.
• Confirmation of a top with a range violation on 05/01/13 @ 92.42. Confirmation of a top with a close violation on 05/01/13 @ 91.03. Downside Targets = 88.20 – 86.57.
• June WTI Crude Oil likewise dropped significantly lower on Wednesday following a dramatic increase in storage supplies as it dropped back below the 10- and 20-day moving averages near last week’s mid-point.
• Given the current intraday oversold volatility the WTI market experienced on Wednesday, expect a short-covering rally back near $91.75 before rolling over and breaking through the $90 mark as initially projected in Tuesday evenings report.
• Projected Daily Range: 1.85
• Projected Weekly Range: 5.37
• Projected Monthly Range: 7.11

Natural Gas (June ‘13):

• Short Term Trend is bullish.
• Confirmation of a top with a range violation on 04/24/13 @ 4.201 Confirmation of a top with a close violation on 04/24/13 @ 4.200. Downside Targets = 3.988 – 3.875.
• Bearish OVB generated on Wednesday.
• June Natural Gas dropped more than $0.12 lower off the new weekly highs this afternoon following Chesapeake’s decision to raise natural gas production. It made new lows into the close of the session while impacting the 10-day moving average.
• Price action heading into the storage report on Thursday is decidedly bearish and should the number come in above estimates, traders should look for the market to drop as low as $4.14 by week’s end.
• Projected Daily Range: .125
• Projected Weekly Range: .304
• Projected Monthly Range: .580