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Following my analysis on June 9th, where I projected a 23–25% pullback in crude oil $CL_F ( 0.0% ) and diesel $HO_F ( 0.0% ) futures, the markets have responded with significant downward momentum:
Crude Oil Correction:
We have seen a decisive "gap down" on the weekly charts this week, consistent with my previous projections.
Diesel Futures:
Diesel has continued its downward trajectory as anticipated. My analysis suggests there is still potential for further downside of approximately 15–16% before finding firm support.
I will continue to monitor these key technical levels closely as we evaluate whether the current price action remains a correction or signals a deeper structural shift.
Market Outlook:
I am currently projecting a significant 23-25% decline in both crude oil and ultra-low sulfur diesel fuel futures.
While the end of the recent conflict may impact momentum, the primary downtrend remains the focus.
Crude Oil Targets:
WTI Crude Oil Nearby Futures Month Weekly chart
My technical levels of interest for oil include an initial pullback to $75/barrel and a potential gap fill at $68.
My long-term target objective remains anchored at $45.
Diesel Fuel Dynamics:
NY Harbor USLD Futures Nearby Month Weekly Chart
Last week, we anticipated a 20-25% drop in diesel futures.
In my experience, pump prices typically lag these futures movements by approximately one day, so expect the retail market to mirror this downtrend shortly.
Technical Analysis:
Weekly charts show strong bearish momentum, with prices gapping lower and approaching the 50- and 200-week moving averages.
We are monitoring for a close above $79-$80 to see if an impulse wave is still in play, but current resistance suggests further weakness.
Strategic Recommendation:
There is no reason to panic-price diesel right now.
With an estimated 15-16% additional downside potential, I recommend waiting for the trend to fully play out before locking in prices.
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Trent Klarenbach
306-463-8607
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Nothing written, expressed, or implied here should be considered investment advice or an admonition to buy, sell, or trade any security or financial instrument. As always, do your own due diligence.
