Technicals Suggest Softer Heating Oil Possible

Posted on 02/07/2018 10:03 AM

This excerpt from AgriTalk After the Bell from yesterday, Feb. 6, 2018 explores the technical features in March heating oil futures. Pro Farmer's Dan Vaught believes the current technical posture in March heating oil futures may favor the downside, which would put some welcome pressure on farm diesel prices.

Chip: Its time for After the Bell's Tech Talk. Pro Farmer Senior Economist Dan Vaught joins us. Dan, what's the market move that matters the most today, buddy?

Vaught: Hey Chip, I'm looking at March heating oil futures again today. Heating oil surged through late 2017 with the March contract climbing from $1.432 per gallon last June to it's January 26 peak atDan Vaught $2.1362. It recently reversed, falling through support at its 10 and 20 day moving averages last week, but still seemed likely to hold above its 40 day moving average and psychologically important $2 level in the short term.

After closing right at its 40 day [moving average] around $2.02 Monday, it fell through that level as well as $2 [Tuesday] closing at $1.9887. This is the first close below the 40-day moving average since early December and only the second time since it broke out in July.

This suggests farmers may soon get some relief from rising diesel prices.

Chip: Alright, good stuff. Thank you very much. Something to keep a close eye on. That is Pro Farmer Senior Economist Dan Vaught.

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