For the second consecutive day, West Texas Intermediate (WTI) crude oil declined and Brent futures finished the day higher.The April WTI contract price shed 34 cents Wednesday, settling at $56.22 per barrel. The WTI peaked at $56.40 during the midweek session and bottomed out at $55.42.Referencing this monthly WTI chart showing a more macro view of the market, Rafferty Commodities Group, Inc. Vice President Steve Murphy noted that his firm has drawn a horizontal resistance line at the 5800 to 5100 area. He noted that highs over the last two weeks of trading days have occurred at 5781 on Feb. 22 and at 5788 on March 1."On Friday, March 1, when the market failed to follow through and close above the 5781 to 5810 area, it alerted us that the market would likely sell off," said Murphy, adding that his firm referenced the 5800 area on Feb. 27 in comments to Rigzone. “The market gave us a good opportunity to sell against this area. This resistance area remains pivotal for us. We like trading from the short side with a stop above the 5810 area. A close above the 5810 area could send the market considerably higher."Brent crude for May delivery showed positive momentum Wednesday. The benchmark gained 13 cents and settled at $65.99 per barrel.Also settling higher Wednesday was reformulated gasoline (RBOB). April RBOB futures added two cents to end the day at $1.79 per gallon. Murphy noted that his firm’s daily chart for April gasoline shows the market finally breaking out above the 17800 resistance area. The chart reveals a series of recent highs that have fallen short of that area, he said."The 17800 area formed the upper boundary of a sideways consolidation pattern that had developed since the middle of February," Murphy explained. "The bottom of the pattern is supported by the 17000 area where we have also drawn a horizontal line. As a result of this breakout, we like buying gasoline and look for it to test the next level of resistance at the 18340 area. We look for the gasoline market to lead the complex higher, which will result in the gasoline crack spreads widening."Henry Hub natural gas futures faltered Wednesday, losing four cents. The April contract price for the gas benchmark settled at $2.84. Murphy told Rigzone that his firm’s daily chart for April natural gas reveals two areas of consolidation, with one falling between the 2600 and 2750 areas."Since the market broke out above the 2750 area, which was previous resistance, the 2750 area now forms the bottom of the pattern bordered by the 2929 area on the top," said Murphy. "We look for the market to trade up to the 2929 area where we like to take profits on longs and take a short position. Our stop would be a close above the 2929 area. If the market can close above this area, it should send the market much higher."
by Matthew V. Veazey Rigzone Staff | Wednesday, March 06, 2019