December crude oil closed down $0.36 a barrel at $85.71 yesterday. Prices closed nearer the session low yesterday in quieter trading. While not overtly near-term market-sensitive yesterday, a shocker study was released by the International Energy Agency (IEA). It said that in just seven years the U.S. will be the largest crude oil producer in the world and shortly thereafter will not need to import any crude oil. This surprised most in the market place and it has huge longer-term implications for the psychology of the market place. Reason: For years there has been a Middle East “fear premium” added into the overall price of a barrel of crude. As time goes on now, that fear premium will gradually recede to no premium at all. To extrapolate further, yesterday’s IEA report may mean the 2008 all-time high in Nymex crude oil futures, at near $150.00 a barrel, may not be reached again for decades. Crude oil bears still have the overall near-term technical advantage. Prices are in a two-month-old downtrend on the daily bar chart. The next near-term upside price breakout objective for the crude oil bulls is producing a close above solid technical resistance at last week’s high of $89.22 a barrel. The next near-term downside price breakout objective for the crude oil bears is to produce a close below solid technical support at $82.00. First resistance is seen at yesterday’s high of $86.54 and then at $87.00. First support is seen at $85.00 and then at last week’s low of $84.05. Wyckoff’s Market Rating: 3.5
December heating oil closed down 40 points at $3.0015 yesterday. Prices closed near mid-range yesterday. Bears have the near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. The bulls’ next upside price breakout objective is closing prices above solid technical resistance at $3.0750. Bears’ next downside price breakout objective is producing a close below solid technical support at the November low of $2.9347. First resistance lies at yesterday’s high of $3.0279 and then at $3.0500. First support is seen at yesterday’s low of $2.9871 and then at $2.9600. Wyckoff’s Market Rating: 4.5.
December (RBOB) unleaded gasoline closed down 237 points at $2.6755 yesterday. Prices closed nearer the session low yesterday after hitting a fresh three-week high early on. Bulls and bears are back on a level near-term technical playing field. The next upside price breakout objective for the bulls is closing prices above solid technical resistance at $2.7500. Bears’ next downside price breakout objective is closing prices below solid support at the November low of $2.5524. First resistance is seen at $2.7000 and then at $2.7250. First support is seen at $2.6500 and then at $2.6250. Wyckoff’s Market Rating: 5.0.
December natural gas closed up 6.5 cents at $3.568 yesterday. Prices closed nearer the session high yesterday on some short covering and bargain hunting. Prices hit a fresh six-week low early on yesterday. Bears still have the slight overall near-term technical advantage. Prices are in a steep three-week-old downtrend on the daily bar chart. The next upside price breakout objective for the bulls is closing prices above solid technical resistance at $3.75. The next downside price breakout objective for the bears is closing prices below solid technical support at $3.40. First resistance is seen at last week’s high of $3.62 and then at $3.70. First support is seen at yesterday’s low of $3.47 and then at $3.42. Wyckoff’s Market Rating: 4.5.
