The Daily Energy Technical Report 6.13.13

MrTopStep.com

A weaker dollar also supported the crude. There was bellicose rhetoric out of Israel and military action in the Golan Heights. Benjamin Netanyahu said that sanctions are not enough when dealing with Iran. It’s unclear whether this was said to influence Friday’s Iranian elections, or if it was a prompt to the Obama administration into action while recognizing the danger of Iran’s nuclear ambitions. There are no moderates on the bill for Iran’s election, but some analysts say that the differences between the conservative candidates revolves around their foreign policy.

Police action was evident in Turkey on Wednesday, as President Erdogan ordered Istanbul square cleared. Once police have cleared the square, he offered to hold talks with his critics.

Equity prices were softer on Wednesday on fears of the reduction of stimulus. Lack of further action from Japan also has the currency and equity markets unnerved.

WTI
WTI S2 S1 CLOSE R1 R2 TREND
DAILY 9324 9496 9588 9685 9825 CONGEST LOWER
WEEKLY 8714 9182 9603 9980 10300 CONGEST

 Daily Moving Averages: 21, 55, & 100: 94.63, 93.81 , 94.08

Weekly Moving Averages: 21, 55, & 100: 94.08 , 91.29 , 93 .44

Despite a build in inventories, July managed to rise as the build was not a large as feared.

  • More importantly though was the draw in Cushing that prompted arb traders to buy July.
  • This steadies the market and managed to send July up to the resistance at 96.50.
  • It appears that July did complete a leg to the upside with the Wednesday high.
  • The weakness that is apparent in the equities will likely spill over Thursday especially if Asia gets rocked.
  • A supporting factor is the violence in the Middle East, but that is playing second fiddle to the macro economy for now.
  • Nevertheless, one cannot ignore the neckline of the massive inverted head and shoulders.
  • for Thursday that will cut the graph at 96.85. A daily settle above that level is very bullish.
  • However, we do not think that will be a concern for Thursday. Rather we look for July to congest lower.
  • We are a cautious seller of the rally. The resistance is 96.10 to 96.30. The upside pivot is 96.50.
  • July has a minor downside pivot at 95.50, which will lead it to 95.00 to 94.80. The pivot is 94.45. The key pivot to the intraday chart is 93.70.
  • This is a congested pattern and market movement will have truncated ranges. Intraday volatility has fallen to 1.5%.
  • The U.S. has the biggest the greatest increase in oil production in the world last year  and the largest increase in U.S. history.
  • Summer is here.

 

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crude 061313

 

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CRUDE WKLY 061013

BRENT
BRENT S2 S1 CLOSE R1 R2 TREND
DAILY 10182 10269 10349 10417 10594 DOWN
WEEKLY 9357 10013 10456 10855 11060 CONGEST

Daily Moving Averages: 21, 55, & 100: 103.21 , 103.59 , 107.88

Weekly Moving Averages: 21, 55, & 100: 108.18 , 108 .11, 110.59

As one can see on the daily chart below, July has been congesting in a triangle.

  • It appears that the move up from 101.82 is complete with the 104.10 high of Wednesday.
  • Although Middle East violence supports this market, our view is the macro economy trumps the Middle East unless oil is involved.
  • This being the case July is likely to congest lower Thursday.
  • She is seen with minor resistance at 103.75 to 103.85.
  • The minor upside pivot is 104.17.
  • We are a cautious seller of the rally.
  • Traders will be carefully watching Asia for evidence of further weakness.
  • China comes back from holiday Thursday (Dragon Boast Day).
  • July’s minor downside pivot is 103.30.
  • Sliding through that level will confirm a short-term top.
  • It will signal a drop to 102.95 to 102.70. The pivot is 102.50.
  • The key downside pivot is 101.80.
  • We are a cautious seller of he rally. This will be at 103.80 with a protective stop above 108.20.

 

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brent 061313

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BRENT WKLY 061013

WTI-BRENT
WTI-BRENT S2 S1 CLOSE R1 R2 TREND
DAILY -902 -810 -761 -698 -618 CONGEST LOWER
WEEKLY -1355 -1000 -853 -698 -379 UP

Daily Moving Averages: 21, 55, & 100: -8.37 , -8.64 , -8.60

Weekly Moving Averages: 55, 100, & 200: -10.25 , -14.14 , –17.37

Our model below shows tow technical considerations for the bulls.

  • Firstly, there is a negative divergence that is prominent on the 2-hour chart.
  • It also corresponds to a five wave completed move.
  • This suggests that July will correct lower for Thursday.
  • There will be initial resistance at -7.45. The pivot is -7.40,
  • A fifteen-minute settle above the pivot will tackle the key upside pivot at -7.00.
  • However, the model we are employing sees July initially dropping to the minor downside pivot at -8.10.
  • Busting that pivot will con firm a short-term top.
  • It will further signal a continued drop to test -9.00.
  • We are a cautious seller of the rally. The protective stop above -7.40.

 

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wti-brent 061313

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wti-brent wkly 060313

RBOB
RBOB S2 S1 CLOSE R1 R2 TREND
DAILY 27190 27850 28101 28280 28625 DOWN
WEEKLY 26880 27465 28715 29770 30415 PEAK

Daily Moving Averages: 21, 55, & 100: 2.8385, 2.8520 , 2.9376

Weekly Moving Averages: 21, 55, & 100: 2.9534 , 2.8748 , 2.8846

Although this is a choppy formation, the short-term look is for lower price Thursday.

  • It appears as if July movement to 2.84 Wednesday was a bear leg correction.
  • This signals a move lower is likely.
  • July will have initial pivot support at 2.79 to 2.7850.
  • Breaking the 2.7850 pivot will drop July to trend support at 2.7650.
  • We are a seller of the rally.
  • A weak market will fail  2.8250 to 2.83. The pivot is 2.84. We will place our stop above there.
  • If trend support is violated, July will fall to pattern support at 2.72 to 2.7150.
  • The key upside pivot is 2.89.

 

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mogas 061313

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MOGAS WKLY 061013

ETHANOL
ETHANOL S2 S1 CLOSE R1 R2 TREND
DAILY 2391 2415 2431 2450 2480 CONGEST
WEEKLY 2365 2430 2506 2650 2750 DOWN

Daily Moving Averages: 21, 55, & 100: 2.616, 2.544 , 2.499

Weekly Moving Averages: 21, 55, & 100: 2.500 , 2.414 , 2.424

July was forecast to move lower Wednesday and the crop report gave it a volatile day.

  • However, July did fall to our initial target after having hit our resistance level.
  • It appears that July completed a leg to the downside with the Wednesday low.
  • What is not clear is if it completed a wave to the downside.
  • Regardless of the degree of completion, it is likely that July congests higher or Thursday.
  • We do note that output according to the DOE is 885k bbls for the week.
  • July will have initial resistance at 2.445 to 2.45. The only pivot that is close by is 2.473.
  • The key pivot to the intraday chart is 2.48. Once cleared, July will confirm a short-term bottom.
  • However, this model is contingent upon July holding 2.41 before moving higher.
  • A break of the pivot will set her on a course for the 100 DMA at 2.391.

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ethanol 061313

 

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ETHANOL WKLY 061013

DISTILLATE
HEAT S2 S1 CLOSE R1 R2 TREND
DAILY 28260 28630 28952 29150 29515 DOWN
WEEKLY 27255 27665 28931 29995 30540 UP

Daily Moving Averages: 21, 55, & 100: 2.8778 , 2.8875 , 2.9625

Weekly Moving Averages: 21, 55, & 100: 2.9700 , 2.9699 , 3.0030

July was the strongest market in the petro complex Wednesday.

  • It was helped by a decline in inventories of 1.2 mb when an increase of 1.3 mb was expected.
  • Also supporting prices was a refinery shut down in Rotterdam, which goosed gasoil.
  • Nevertheless it appears that July completed a leg higher at 2.9040 Wednesday.
  • This is likely to mean a congestive pattern to the downside.
  • it probably will not be material unless Asia falls apart.
  • Therefore the initial support will be found at 2.8650 to 2.86. the minor pivot is 2.8550.
  • Key support vis-a-vis the pattern is 2.83 to 2.8250.
  • Although we feel the prices will congest lower, it is not correct policy to sell the strongest market. We will then stay on the sidelines for Thursday.

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heat 061313

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HEAT WKLY 061013


NATGAS
NATGAS S2 S1 CLOSE R1 R2 TREND
DAILY 3587 3645 3777 3810 3868 DOWN
WEEKLY 3385 3645 3828 4030 4350 DOWN

Daily Moving Averages: 21, 55, & 100: 4.015 , 4.074 , 3.812

Weekly Moving Averages: 21, 55, & 100: 3.804 , 3.367, 3.264

We have been bearish of this market and remain so.

  • The model we offer below has July completing the third of five legs to the downside.
  • The bounce off 3.70 is likely just short covering prior to the inventory report.
  • The expectations are for a build of 96 BCF.
  • July will have initial resistance at 3.80 to 3.81.
  • This is the home of the 100 DMA on the continuation chart.
  • This is likely to be the first hurdle for the bulls to better. We, however will not hold our breath.
  • But in the event that July manages to punch that level, she will eye the key upside pivot at 3.865.
  • We are a seller of the rally. This will be at 3.81 with a protective stop above 3.825.
  • The pivot of 3.71 when broken will yield a dip to 3.65 to 3.63.
  • There are two ways to come up with a support level of 3.645. This is a place that will be primed for a bounce.

 

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nat 061313

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