Technical Analyst, Saxo Bank
Summary: Brent and WTI crude oil trading at the lower end of the Summer 2023 consolidation area and below the 200 weekly MA. Possible short-term downtrend exhaustion but medium-term key support levels shoudl be obseved
Collapsing Henry Hub and Dutch TTF Natural gas could stilld rop furhter before trend exhaustion and correction
Brent Crude oil is trading at the lower end of the Consolidation area back from April- May this year just above $72/brl. The RSI divergence (Brent has had lower closing prices but RSI values have not i.e., divergence, selling pressure is easing/exhausting) is indicating that this could be an exhaustive move, at least short-term
Medium-term Brent is testing the slightly rising trend line going back to 2021 – see weekly chart – and is currently trading below the 200 Weekly Moving Average for the first time since 2020.
If Brent is closing a week below both the support at around 69.90 is likely to be broken sending Brent down to test key support at around 64.57.
Weekly RSI is below 40 threshold thus i.e., in negative sentiment indicating lower Brent oil prices.
A daily close above 77.25 will put this bearish scenario on pause potentially demolishing it. If that occurs a move to test the upper falling trend line (daily chart) is likely to be tested, with potential to 80-82.50 area
Light Sweet Crude oil (WTI ) is drawing almost similar picture as Brent. RSI divergence is indicating short-term trend exhaustion near the lower level of the Consolidation area at around 67.
However, the trend is down and similar to the4 Brent oil weekly chart WTI is currently trading below its weekly Moving Average and weekly RSI is below 40 i.e. in negative sentiment
A break below 67 is likely to push WTI to be testing support at around 61.56
A close above 72.65 is likely to push WTI to test the upper falling trendline – daily chart. A break above a correction to around 77.50 would be in the cards
Dutch TTF gas sell-off is continuing after the future broke below the lower rising trendline. Buyers are trying to lift the future contract price back above €35.79 but negative RSI is indicating further downside. Support at around 30.62A close below Dutch could collapse to June-July lows around 23.
To reverse the bearish picture a close above 44.80 is needed
Henry Hub gas has been a free fall since early November after it was rejected at the 3.63 resistance.
RSI is showing oversold but no divergence indicating a last exhaustive move could be seen, potentially down to around 2.16, before a correction
If Henry Hub is breaking back above the upper falling trendline and strong resitance at 2.49 a bullish correction to the 200 DMA could be seen.
Strong resistance at around 2.95
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