Crude Oil Short-Term Forecast – April 10, 2018

May WTI crude oil’s rise from the recent $61.81 swing low extended again today and is poised to continue. Monday’s bullish piercing pattern was confirmed by settling above Friday’s $63.7 open. There are also no reversal patterns or setups that indicate the move up will end. In addition, the $65.86 swing high fulfilled the smaller than target of the wave $59.91 – 66.55 – 61.81, so any pullback will most likely be corrective of a larger scale move up.

WTI Crude Oil - Daily with Kase StatWare
WTI Crude Oil – Daily with Kase StatWare

Upon a close over $65.9 look for next resistance at $66.5. This was the equal to target of the wave $57.6 – 64.07 – 59.91 and the level at which the move up stalled on March 26. So far, $66.5 has held on a closing basis, so if the move down is going to have any chance of continuing in the near-term $66.5 must hold. A close above this would open the way for at least $67.3 and likely higher.

Because the smaller than target of the wave up from $59.91 was met this afternoon a corrective pullback might take place first. Initial support is $65.0, though a test of today’s $64.4 midpoint would not be unusual. Support at $64.4 should hold, but the key level is $63.3. Settling below $63.3 would indicate the move up has stalled again and that another attempt to move lower is underway.

This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural gas continues to show signs that it has settled into a trading range between nominally $2.55 and $2.85. Trading will most likely remain erratic as the market awaits factors to push it out of the range. However, it may be awhile before such factors come forth as the market will be pressed to balance inventories that are well below the five-year average against strong production during the low demand spring shoulder months.

Quantitative factors are balanced and reflect the neutral near-term outlook. Today’s initial move lower held support at $2.67 before rising and challenging important resistance at $2.75. The subsequent pullback from $2.746 forms a long upper shadow on the daily candlestick and is poised to challenge $2.67 again tomorrow. The likelihood of a test of support was also accentuated by a confirmed bearish KaseCD divergence on the $0.015 Kase Bar chart. A close below $2.67 will call for $2.63, which connects to $2.59 and $2.56.

That said, trading will likely remain choppy and a close above $2.74 would open the way for $2.78. Settling above $2.78 would shift near-term odds in favor of challenging the top of the trading range around $2.85.

Natural Gas with Kase StatWare - 0.015 Kase Bar
Natural Gas with Kase StatWare – 0.015 Kase Bar

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

WTI crude oil’s move up stalled near $66.4, the equal to (1.00) target of the primary wave up from $57.6 last week. The subsequent pullback initially looked corrective, forming four stars and settling the week above March 23’s open. However, the move down accelerated on Monday and is poised to challenge important support at $62.4 within the next day or so.

WTI Crude Oil - 0.35 Kase Bar
WTI Crude Oil – 0.35 Kase Bar

Today’s move up from $62.8 was shallow and choppy and forms a bearish flag. The flag’s lower trend line is nominally $63.2, which is also an important retracement and today’s midpoint. An early move below this tomorrow would confirm a break lower out of the flag and open the way for $62.4.

That said, should $63.2 hold and prices rise above the flag’s upper trend line around $64.3, look for a test of key resistance at $65.1. Settling above $65.1 would shift near-term odds back in favor of a larger scale move up with near-term targets at $66.1 and $66.7.

This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.

The long-term outlook for natural gas is negative but the May contract met and held support around its $2.60 swing low Monday. The subsequent move up is most likely corrective of a longer-term decline to challenge $2.55 and lower. Even so, there is some technical evidence that the move up could still extend to at least $2.75 before another test of $2.60 and lower takes place.

The upward correction from the $2.61 swing low stalled at $2.731 today before pulling back to $2.69. The pullback forms an intra-day bullish pennant, so there is still a good chance the upward correction will extend. However, prices will have to break higher out of the pennant tomorrow and settle above $2.75 soon if the move up is going to challenge $2.82 and eventually key resistance at $2.86.

May Natural Gas - Daily
May Natural Gas – Daily

A move below $2.67 early tomorrow would be a likely sign that the pennant has failed and that the move down will challenge the $2.60 swing low again. A close below this would call for key lower support at $2.55, which is the last level protecting the continuation chart’s $2.522 swing low.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

WTI crude oil stalled near crucial resistance at $66.4 Monday and confirmed an intra-day bearish KaseCD divergence. The subsequent pullback completed a bearish Harami line and star today by closing below Friday’s $65.08 midpoint. The pullback is most likely corrective but should test the Harami line and star’s confirmation point near $64.2 tomorrow. A close below this would call for a larger downward correction toward key near-term support at $62.5.

May WTI Crude Oil - 0.50 Kase Bar
May WTI Crude Oil – 0.50 Kase Bar

Tomorrow, look for initial resistance at $65.3 and then $65.8. The $65.8 level is expected to hold, though the near-term outlook would only become bullish again upon a close above $66.4. This is still a crucial resistance level for the wave structure up from $57.6 that connects to $67.1 and then the next major objective protecting the $70.0 level.

This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.

Last week, April natural gas broke below the lower trend line of the upward sloping channel it had been oscillating within since February 12. Prices also settled below important support at $2.66. The move down hesitated yesterday, but resistance at $2.71 held this morning and prices fell below the $2.64 swing low today. All of this indicates that the outlook for natural gas remains negative and that major support in the mid-to-low $2.50s should be tested again soon.

Technical factors call for at least $2.62 and likely $2.59 tomorrow. There is trend line support around $2.62, and $2.59 is a confluent wave projection. Otherwise, there are no patterns or signals that indicate the move down will stall. A close below $2.59 would open the way for major support at $2.55. This is the last level protecting the continuation chart’s $2.522 swing low, a close below which would call for a much more bearish long-term outlook.

April Natural Gas - Daily
April Natural Gas – Daily

Should prices turn higher, the move up will most likely be corrective and should hold the $2.71 intra-day swing high. Key resistance for the near-term is $2.74. A sustained close above this would not doom the move down but would call for a larger upward correction before the decline continues.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

May WTI crude oil fulfilled a highly confluent and extremely important target at $64.0 today when price rose to $63.98. The move up comes after prices broke higher out of the bullish descending flat wedge Friday and then tested and held the pattern’s upper trend line Monday. As discussed in our weekly forecast, $64.0 is the gateway to a stronger and possibly longer-term bullish outlook. A sustained close above $64.0 will open the way for the next major objective at $66.4, with intermediate targets of $64.8 and $65.4 between.

WTI Crude Oil - 0.50 Kase Bar
WTI Crude Oil – 0.50 Kase Bar

Crude oil prices pulled back a bit from $63.98 and confirmed a weak bearish KaseCD divergence on the $0.50 Kase Bar chart. This, and the small wave down from $63.98, indicate there is a modest chance for a larger pullback tomorrow. Initial support is $62.9 and key support for tomorrow is $62.3. A close below $62.3 would call for a larger correction to $61.4, which is most important because a close below this would be an early indication that the move up may have stalled again. That said, the outlook does not become solidly negative until there is a sustained close below at least $60.3.

This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.

The near-term outlook for natural gas became more negative today and prices are poised to test at least $2.70 and possibly $2.66 tomorrow. The small move up at the end of the day indicates resistance will probably be challenged first, but $2.76 and no higher than $2.79 is expected to hold.

The confirmation of a daily evening star and bearish RSI divergence and the settle below the 50-day moving average have opened the way for a continued pullback from Tuesday’s $2.788 swing high. In addition, March 9’s $2.712 swing low was taken out when prices fell to $2.71. This was the first time since February 12, when the upward sloping channel began to form, that prices have fallen below a prior daily swing low. The move down may be corrective, but these bearish factors and reversal patterns have increased odds for a test of major near-term support at $2.66. A close below this would open the way for targets below $2.60 again.

That said, support at $2.72 held on a closing basis and the small move up from $2.71 will probably challenge today’s $2.76 midpoint first. This level should hold, but key resistance is $2.79, near today’s open. A close above $2.79 would shift near-term odds back in favor of $2.82 and ultimately $2.87, the key threshold to a more positive outlook as discussed in our longer-term weekly forecast.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

The WTI crude oil forecast remains slightly negative given today’s decline to $60.27 after testing and holding resistance around $62.0. The move down is expected to continue, but a small double bottom around $60.27 indicates prices will probably challenge $61.4 first. Resistance is expected to hold.

Today’s decline to $60.27 fulfilled important projections for recent waves down from $64.24, $63.28, and $62.33 that connect to $59.7 and key support at $59.1. As discussed in the weekly forecast, $59.1 is the gateway for a longer-term bearish outlook. It may take at least another few days to reach $59.1, but a close below this would finally break WTI’s stalemate and open the way for a more bearish outlook.

That said, this afternoon’s move above the $60.85 swing high completes the small double intra-day bottom at $60.27. The pattern’s target is $61.4, which is also in line with today’s open. This level should hold, but a close over $61.4 would call for another attempt at $61.9 and possibly $62.6. The latter is most important for the near-term because it connects to $63.3 and ultimately $63.9, the key threshold for a long-term bullish outlook discussed at length in the weekly forecast.

This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.

Since February 12, April natural gas had risen in a choppy upward sloping range that formed a bearish flag. However, prices broke higher out of the flag today and settled above the pattern’s upper trend line. The flag’s failure to break lower is bullish for the near-term and calls for a larger upward correction before the move down ultimately continues.

The next objective is $2.80, which is the 100-day moving average and a confluent projection for the multitude of waves and sub-waves that formed the flag. A close above this would call for $2.83 and possibly $2.87.

The $2.83 target is a potential stalling point because it is in line with the 62 percent retracement of the decline from $2.983 and the 200-day moving average. If the move up is going to remain a “normal” correction, $2.83 should hold.

April Natural Gas - Daily
April Natural Gas – Daily

Key resistance is $2.87. This is the smaller than (0.618) target for April natural gas’ wave $2.487 – 2.983 – 2.565. Waves that meet the smaller than target typically extend to the equal to (1.00) target, in this case, $3.06. Therefore, should April settle above $2.87 look for prices to rise above $3.00 again.

All of that said, the long-term outlook for natural gas remains negative, and even a move above $2.87 will do little to dampen that. For now, though, support at $2.70 should hold and key support is $2.65. These are the 38 and 62 percent retracements of the move up from $2.565, so far. A close below $2.65 would shift near-term odds back in favor of a continued decline to challenge major support in the low $2.50’s.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.