Oil Prices Rise Again
West Texas Intermediate (WTI) and Brent crude oil futures finished higher for the second consecutive trading day during the midweek session.
The WTI for June delivery added 24 cents Wednesday, settling at $62.02 per barrel. The intraday range spanned from $60.85 to $62.34.
Steve Blair, senior account executive with the RCG Division of Marex Spectron, told Rigzone the June WTI has continued to trade in the congestion range that has been in place since May 2 – with support at $60.52 and resistance at $63.00.
“There is also an uptrend line of support from early February that prices have tested and held several times since May 6,” said Blair. “This congestion range has given traders numerous trading opportunities to buy against the support and sell against the resistance, while simply waiting for prices to break out in either direction.”
In addition, Blair observed that a downtrend line of resistance seen on the daily chart will soon converge with the uptrend line of support.
“As prices approach this convergence the compression should springboard prices in the direction of the breakout,” Blair noted.
July Brent futures settled at $71.77 per barrel Wednesday, reflecting a 53-cent increase.
Like the June WTI, the July Brent has continued to follow an uptrend line of support that has been tested a number of times since May 6, said Blair.
“The congestion pattern is somewhat wide between the $68.34 support and the $72.48 resistance,” Blair noted. “Like WTI, there is also a downtrend line of support and Brent will also be coming to a convergence of the trendlines and the compression will also springboard prices in the direction of the breakout.”
Reformulated gasoline (RBOB) also edged upward Wednesday. The June RBOB contract price added nearly four cents to settle at $2.01 per gallon.
In recent months, RBOB appears to have been the leader of the petroleum complex, Blair said. Citing the daily RBOB chart, he pointed out a longstanding uptrend line of support that has been tested – and slightly penetrated – over the past week or so.
“However, the market has managed to continuously close at or above the trendline,” he said. “The market pushed above the $1.9735 resistance today and is now in a very wide congestion range with minor resistance at $2.0220. Further, and major resistance seen at the downtrend line today at the $2.0702 level. A close above the downtrend line would propel the market to the next resistance at $2.0969.”
Among the energy benchmarks tracked by Rigzone, only Henry Hub natural gas posted a loss Wednesday. June gas futures shed nearly six cents to settle at $2.60.
Natural gas prices last Friday closed above the $2.612 major resistance level and had managed to stay above that support, but Wednesday’s price action saw the market come back down into the congestion range that prices had broken out of on Friday, Blair said.
“Resistance now once again becomes the $2.612 level with some minor resistance around the $2.707 level and further major resistance at $2.759,” he observed. “Natural gas continues to trade mostly on the day-to-day weather forecasts, but the recent rally also had considerations of lower production levels without shoulder season maintenance.”
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.