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Bearish crude and stable product contracts

Published Tuesday, February 24th, 2015

The battle between the crude and product contracts continued and at the moment there is no obvious winner. The leader of the product pack is undoubtedly Heating Oil which settled over its important 221.00 range resistance. It is pulling back below this area this morning but so far holding the 215.30 range support. Whilst this is the case the contract will look ok and should have another go at the 221.00 level. On further weakness and on a close below 215.30 the 100-day M/As (212.55/209.89) will shortly be in sight. RBOB gained somewhat on the day but more importantly it held the 162.60 range support. This is the daily high on the March contract on February 3. On a break below this support the contract is expected to fall to the 5 (162.19) and to the 8-day M/As (161.52). A close below the lower of them is bearish. It is, however, not the case at the moment and given the slightly positive performance from yesterday the odds are on a jump up to the 168.12 range resistance, a close above which is bullish.

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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.