0 comments

WTI and Gas Technical Outlook: 11/24

by on November 25, 2013 1:21 am BST
 

West Texas Intermediate crude futures gaps down in tonight’s opening as price action hit resistance within a consolidation channel. Crude continues to trade on supply and demand woes as stockpiles have increased for a six straight month to 39.9 million barrels. According to last week’s inventory report from the Energy Information Administration (EIA), there was a .4 million barrel increase from the previous week. This far exceeded forecasts of a decline of .2 million barrels.

Crude is still range bound and won’t pick a direction until either the resistance or support breaks first. Stockpiles of crude should continue to increase throughout the winter months. Near-term price action will likely test the $92.50 support of the consolidation.

1D Chart of QM

1D Chart of QM

Gas prices increased in the United States by 3.41 cents, according to the Lundberg Survey Inc. Gasoline stockpiles decreased 345K barrels in the week ending on November 15. The average price of regular gas increased to $3.2517 per gallon. Higher gas prices are expected by analysts regardless of the price of crude.

“Refiner margins are still squeezed, and now retailers are paying higher wholesale prices so they’re getting squeezed. There’s probably another five to 10 cents increase to come on the street even if crude oil prices don’t jump higher,” said Trilby Lundberg.

RBOB gas futures slumped almost 1.5 percent on the weekly open. Price action is falling below 26.3 percent Fibonacci level on its way back to the recent lows. Previously, RBOB futures rallied hard from the $2.4945 low but hit a price action brick wall at $2.762. The trend strength is above 20, but stagnant, on the ADX. +DMI is ticking downward. RSI is also sloping downward aggressively, currently at 55. Support is likely to be found at $2.61.

1D Chart of RB

1D Chart of RB