WTI oil closes with Brent as spread may fall below $5

Daily Market Analysis for Thursday, 05/09/2013

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 bottom with a range violation on 04/20/13 @ 100.34. Confirmation of a bottom with a close violation on 04/20/13 @ 100.39. Upside Targets = 106.40 – 108.61.
  • VRCB generated on Wednesday. Possible confirmation of a top with a range violation @ 103.53. Possible confirmation of a top with a close violation @ 103.53 or lower.
    • June Brent Crude recovered from early losses to close nearly unchanged on the trading session Wednesday as the market was scooped up as it neared the 10-day moving average following supportive economic data from China.
    • The spread between Brent and WTI continues to narrow and settled below $8 on Wednesday, one of its lowest marks in more than two years, and could come in to less than $5 as WTI may see resistance above $105 and WTI tracks for $100 and new annual highs.
  • Projected Daily Range: 1.62
  • Projected Weekly Range: 5.72
  • Projected Monthly Range: 9.59

WTI Crude Oil (June ‘13):

  • Short Term Trend is bearish.
  • Confirmation of a bottom with a range violation on 05/03/13 @ 94.26. Confirmation of a bottom with a close violation on 05/01/13 @ 94.26. Upside Targets = 97.92.
    • June WTI Crude Oil closed at its highest level in six weeks on Wednesday after better than expected economic data points from China along with expectation of new supply pipelines continue to help prop the market higher as it closes the gap on its counterpart, Brent.
    • WTI’s settlement on Wednesday points the implied price action higher throughout the remainder of the week and with an increase in volatility, the market could trade to as high as $97.92 by week’s end.
  • Projected Daily Range: 1.73
  • Projected Weekly Range: 5.83
  • Projected Monthly Range: 8.93

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.
  • New lows made on the current move Wednesday @ 3.895.
    • June Natural Gas was able to move back to the upside on Wednesday to close above the previous session’s mid-range and just off the daily highs but not before making new lows below $3.90.
    • Look for some follow-through buying leading into Thursday’s storage report as the market tries to fill Monday’s close gap.
  • Projected Daily Range: .139
  • Projected Weekly Range: .373
  • Projected Monthly Range: .570
About the Author
Kris Hicks

KMH is a trading and technical analysis firm that specializes in commodity futures and commodity based ETF’s. Kris Hicks has worked for numerous years in the commodity business and in 2011 accurately forecasted both $25 moves to the downside in May and July and the $25+ move to the upside in October in oil. He also called the all-time high day for gold on Sept. 6, 2011 and forecasted a projected downside target of 1528.10 in March 2012. He was also responsible for projecting the Q2 and Q4 low in the Euro FX to within 13 and 9 ticks, respectively. His trading methodology has a high degree of accuracy which confirms tops/bottoms, projected trading ranges and projected targets for those ranges. His expertise is focused on 16 commodities plus the comparable ETF markets. You can reach Kris at Kris@KMH-Capital.com or visit his website at www.KMH-Capital.com.

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