Oil Prices Finish Lower



Oil Prices Finish Lower
The WTI approached the $63-mark during Wednesday's session.

West Texas Intermediate (WTI) crude oil for May delivery failed to extend its recent string of gains for a fourth day Wednesday, losing 12 cents to settle at $62.46 per barrel. The WTI traded within a range from $62.05 to $62.99.

Last Friday WTI futures finally broke out of the large $4 congestion range - $60.40 to $61.74 – that it had been in since Feb. 15, Steve Blair, senior account executive with the RCG Division of Marex Spectron, told Rigzone. He noted that the market, within two days, immediately moved considerably higher and tested $63.10 – the next major resistance level.

“We continue to favor trading the upper and lower levels of this congestion range until such time as the market either breaks through to the upside or breaks through on the downside, on a closing basis,” said Blair. “A breakout to the upside could propel the market much higher to the resistance seen at $66.80. A downside breakdown could push the market back into the congestion range that we just broke out of after being in it for a month and a half.”

The June Brent contract price also faltered Wednesday, falling six cents to end the day at $69.31 per gallon.

Blair also noted that the June Brent, like the May WTI, broke out of a congestion range that was in place for the same time period. He said that the market, within two days, immediately moved much higher and on Wednesday tested the next major resistance at the $69.85 level.

“We continue to favor trading the upper and lower levels of this congestion range until such time as the market either breaks through to the upside or breaks through on the downside, on a closing basis,” said Blair. “A breakout to the upside could propel the market much higher to the resistance seen at $72.52 or potentially higher. A downside breakdown could push the market bask into the congestion range that we just broke out of after being in it for a month and a half.”

Blair added that the break above the $68.24 level propelled the Brent up to the next major resistance at $69.85, which the market appeared to stall on Wednesday.

“Just like WTI, a close above the resistance could see the market move to the next resistance at $72.52,” Blair said.

Unlike crude oil futures, the price of a gallon of reformulated gasoline (RBOB) finished the day higher. The May RBOB contract settled at $1.95, reflecting a two-cent increase.

Henry Hub natural gas for May delivery lost less than a penny Wednesday. The gas benchmark settled just under $2.68.

Blair observed that May natural gas remains under technical pressure but lately – over the last four trading sessions – the trend line that has been going back to last May. He said that the current trendline for gas shows the first major support at the $2.658 level and the other trend line support at $2.612.

“A breakthrough of both these trend lines could see the market move towards the low $2.50s,” said Blair. “First resistance seen on the daily chart at $2.716 with next at $2.787 and then the top of the recent price movement at the $2.895 level.”



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