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Technical Outlook – Expect a Quiet Day With Upside Potential Early Next year

Published Monday, December 31st, 2012

Christmas was being felt on Friday as the market gently drifted lower on light volumes. With resistances still above the market and support holding there is no change in the technical picture. Unless there is some real market moving news out today we shall probably see a peaceful trading session. Given that the short-term daily M/As and especially the 13-day M/As are holding, it would not be surprising to see resistances under pressure in the New Year and potentially be closed above. Now let us see what these supports and resistances are contract by contract. WTI: The nearest range support is at 90.33/30. This is closely followed by the 8-day M/A at around 90.12 then the 13-day at around 89.07. Only a close below the latter is bearish. On the upside a close over the 100-day contract and the 200-day continuation M/As (91.67 and 91.97) would push the price up to the 200-day contract M/A at 93.47. Brent: the short-term daily M/As are as follows: 5-day 110.35, 8-day 110.16 and 13-day 109.26. In between is the 200-day continuation M/A at around 109.88. A close below the 13-day is bearish. A close over the 100-day continuation M/A at 111.33 and the 111.52 range resistance is bullish. In that case the 112. 33 range resistance level will be the next target. Heating Oil:On the February contract only get bearish if the 13-day M/A at around 300.30 is closed below. In that case we are off to test the 298.46 range support. On the upside we need to see a close above the 8-day M/A and the correction point at 302.56/70 to see a rally up to the 100-day  M/As at 306.06 and 307.80, a close above which would be considered bullish. RBOB: on the February contract watch the 276.30/34 level. The former is the 5-day M/A and the latter is the crucial range resistance. If they are below tonight’s close then I would expect a rally up to the 280.47/48 range resistance. On the downside the 13-day M/A is currently at 271.21. Only a close below this support is negative. Gasoil: a close over the 938.50/75 correction point resistance area is likely to push the price up to the 948.25 range resistance. The 13-day M/A at around 930.75 must hold otherwise this contract is expected to go significantly lower later on this week.

On behalf of PVM I would like to wish you a happy and successful 2013.

Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.