How EconomicWatch Analyses Fuel Prices: Every Metric Explained

Why raw prices are not enough

Knowing that a particular service station is selling ULP for 189.9 cents per litre tells you the price — but it does not tell you whether that is a good deal, whether it is about to rise tomorrow, or how it compares to the suburb around it. Raw numbers in isolation are only the starting point.

EconomicWatch applies a range of statistical and technical analysis tools on top of the raw FuelWatch data and the live Brent crude and commodity price feeds. Some of these measurements are straightforward descriptive statistics (averages, minimum and maximum values); others are the same indicators that professional commodity traders and financial analysts use every day to forecast price direction and assess market momentum.

This article explains every single metric that appears on EconomicWatch in plain English, with enough detail that you can understand precisely what each number means, how it is calculated, and — critically — how to act on it the next time you are deciding where and when to fill up.

Part 1 — Live station statistics (the dashboard panel)

Across the top of the EconomicWatch fuel price dashboard you will see a row of five tiles. These update every time you change the fuel type, apply a filter, or the data refreshes. Together they give you a rapid snapshot of the current market for whatever fuel type and location you are viewing.

Part 2 — Relative price colour coding

Every station card and map marker on EconomicWatch is colour-coded based on how the station's price compares to the current average. This allows you to scan the map or grid instantly and identify cheap clusters without reading individual numbers.

The colour system uses five tiers defined by the difference (in cents per litre) from the average:

Emerald → Green → Amber → Orange → Red  |  Deviation from current average price

Colour	Deviation from average	What it means
Emerald	8 cents or more below average	Exceptionally cheap — strong buy signal
Green	3–8 cents below average	Cheaper than the market — good value
Amber	Within ±3 cents of average	In line with the market — fair price
Orange	3–8 cents above average	More expensive than the market
Red	More than 8 cents above average	Significantly overpriced — avoid if possible

Choosing the thresholds of ±3¢ and ±8¢ is deliberate. For a typical 50-litre fill, a 3-cent deviation equals $1.50 in savings or extra cost — meaningful but modest. An 8-cent deviation equals $4.00 — enough to justify a short detour on most trips. Anything beyond 8¢/litre below average represents a significant market anomaly worth acting on immediately.

These relative thresholds automatically adjust as the market moves. On a day when the average price is 190¢, emerald stations are priced at 182¢ or below. On a day when the average is 210¢, emerald stations are at 202¢ or below. The colour system always tells you your position within the current market, not against some fixed historic benchmark.

Part 3 — Distance calculation (Haversine formula)

When you enable location access in EconomicWatch, every station is assigned a distance from your position, and you can sort the station list by distance to find the closest options. The distance calculation uses a mathematical model called the Haversine formula.

Here is why the Haversine formula is used rather than a simple straight-line (Pythagorean) calculation: the Earth is not flat. If you measure two points on a map as though they were on a flat surface, the error is small for very short distances but grows as the distance increases. The Haversine formula accounts for the curvature of the Earth's surface and produces what is called the great-circle distance — the shortest path between two points on a sphere.

In practice, for distances relevant to urban driving (0–50 km), the Haversine result is accurate to within a few metres. The formula operates on the GPS coordinates reported by your device alongside the latitude/longitude coordinates of each FuelWatch-registered service station.

Distances under 1 kilometre are displayed in metres (e.g., "650m") for legibility. Distances between 1 and 10 kilometres are shown with one decimal place (e.g., "3.2km"). Distances above 10 kilometres are rounded to the nearest whole kilometre (e.g., "24km").

Part 4 — Exponential Moving Averages (EMA5 & EMA20)

Moving averages are among the most widely used tools in financial and commodity analysis. EconomicWatch displays two of them — EMA5 and EMA20 — as coloured lines overlaid on the Brent crude oil and commodity price charts.

What is a moving average?

A moving average smooths out day-to-day price fluctuations (what analysts call "noise") to reveal the underlying trend direction. Instead of looking at a jagged line jumping up and down every day, a moving average gives you a smoother curve that makes the direction of travel much clearer.

Why "exponential"?

A simple moving average (SMA) treats every day in the lookback window with equal importance. A price from 20 days ago counts just as much as yesterday's price. An exponential moving average (EMA) applies a weighting multiplier so that recent prices count more heavily than older prices. This makes it more responsive to current conditions and faster to react to trend changes.

The formula for each data point is:

The EMA is initialised once we have enough data points (5 days for EMA5, 20 days for EMA20). Before that point, the line is not shown on the chart.

EMA5 (5-day) — the short-term tracker

The EMA5 (shown in amber on the charts) represents the short-term momentum of the price. Because it only looks back 5 trading days and heavily weights the most recent prices, it tracks the current price very closely. A rising EMA5 indicates that recent sessions have been pushing prices higher; a falling EMA5 indicates recent downward pressure.

EMA20 (20-day) — the medium-term trend

The EMA20 (shown in blue) is a medium-term trend line spanning approximately one calendar month of trading. It is far less sensitive to single-day moves than the EMA5. When the EMA20 is rising, the broad month-long trend in crude oil or commodity prices is upward; when it is falling, the broad trend is downward.

The EMA crossover — a key signal

The most important thing to watch when two moving averages are displayed together is their relationship to each other:

• EMA5 above EMA20 (golden cross): Short-term momentum is stronger than the medium-term average, which is a bullish (upward pressure) signal. Prices have recently been rising faster than the monthly average.
• EMA5 below EMA20 (death cross): Short-term momentum is weaker than the medium-term average, which is a bearish (downward pressure) signal. Prices are softening relative to the recent month.
• EMA5 crossing EMA20: The moment of crossover is often the most significant data point — it represents a change in trend direction.

Part 5 — Relative Strength Index (RSI)

The Relative Strength Index is a momentum oscillator that measures the speed and magnitude of recent price changes. It was developed by analyst J. Welles Wilder Jr. in 1978 and is one of the most widely used technical indicators in financial markets worldwide. EconomicWatch calculates it over a 14-day period, which is the standard setting.

How RSI is calculated

RSI compares the average size of up-days to the average size of down-days over the last 14 sessions:

The result is always a number between 0 and 100. An RSI of 50 means up-days and down-days have been roughly equal in size over the past fortnight. An RSI approaching 100 means almost every recent day has been an up-day. An RSI approaching 0 means almost every recent day has been a down-day.

RSI zone	Value range	Interpretation
Oversold	Below 30	The asset has fallen hard and fast. Sellers may be exhausted; a price recovery or rebound is statistically more likely.
Neutral	30 – 70	Neither extreme. The market is in a balanced momentum state.
Overbought	Above 70	The asset has risen hard and fast. Buyers may be exhausted; a price pullback or correction is statistically more likely.

It is essential to understand that "overbought" does not mean "must fall now" and "oversold" does not mean "must rise now." In strong trending markets, the RSI can remain in overbought territory for extended periods. The RSI is a probabilistic indicator, not a guarantee. It tells you whether the current pace of movement is historically extreme, which raises the odds — but not the certainty — of a reversal.

For Brent crude oil and commodity prices, RSI extremes are informative because commodity markets are cyclical by nature. An RSI above 75 on Brent crude following a rapid run-up in oil prices has historically preceded a period of consolidation or pullback, which — with the 2–4 week lag — would eventually translate to some relief at the pump.

Part 6 — Linear regression price forecast

In the technical analysis panel, EconomicWatch shows a forecast price for the next data point. This is calculated using ordinary least squares (OLS) linear regression — one of the oldest and most mathematically sound statistical methods available.

What is linear regression?

Imagine plotting the last 30 days of a price on a graph, with the date on the horizontal axis and the price on the vertical axis. You will see a scattering of dots. Linear regression draws the single straight line that fits through all those dots with the smallest possible total error — the famous "line of best fit." Once you have that line, extending it one step further to the right gives you the projected price for the next day.

Where i is the index of each day (0, 1, 2…), pᵢ is the price on day i, x̄ is the mean of all the day indices, ȳ is the mean of all prices, and n is the index for tomorrow.

What the forecast tells you (and what it does not)

The linear regression forecast assumes that the current trend — whether upward, flat, or downward — will continue in a straight line for one more step. It is best thought of as a momentum-adjusted extrapolation: if prices have been gradually climbing over 30 days, the forecast projects one more step up that slope. If prices have been falling, it projects one more step down.

What it does not model is any sudden reversal, news event, or cyclical reset. If OPEC announces an unexpected production cut tonight, the linear regression forecast will not know about it. The forecast value should therefore be read alongside the RSI and EMA signals to form a more complete picture.

The forecast is displayed as a directional difference from the current price — for example, "Forecast: +$0.84" means the model expects the next session to close approximately $0.84 higher than today's close. Green indicates an upward forecast, red indicates a downward one.

Part 7 — Bollinger Bands

Bollinger Bands were developed by John Bollinger in the 1980s and are now standard in virtually every professional trading platform. They consist of three lines plotted around the price and give you an immediate visual sense of whether the current price is within its normal range or at an unusual extreme.

How they are constructed

The three bands are calculated from the last 20 trading days of prices:

The standard deviation (σ) is a statistical measure of how dispersed prices have been around their average. Doubling the standard deviation (2σ) gives bands that, in a normally distributed market, statistically contain approximately 95% of all price observations. Prices touching or breaking through a band are genuinely unusual events — they represent the outer 5%.

Reading the band position

EconomicWatch calculates the current price's position within the bands as a value between 0 and 1, where 0 means at the lower band and 1 means at the upper band. It then displays a label according to this position:

Label	Band position	What it means
Near Lower	0 – 0.15	Price is at or near the lower statistical extreme. Historically rare; often followed by a mean reversion upward.
Lower Half	0.15 – 0.40	Price is below the 20-day average but not at an extreme. Mild downward bias.
Mid Range	0.40 – 0.60	Price is near the 20-day average. No statistically significant directional signal.
Upper Half	0.60 – 0.85	Price is above the 20-day average. Mild upward bias.
Near Upper	0.85 – 1.0	Price is at or near the upper statistical extreme. Historically rare; often followed by a mean reversion downward.

The bandwidth — volatility at a glance

The width of the bands is itself informative, even without knowing where the price sits within them. When the bands are wide, standard deviation is high and the market has been volatile — large price swings in both directions. When the bands are narrow (sometimes called a "Bollinger squeeze"), volatility is low and prices have been stable. A squeeze is often followed by a significant breakout in either direction, because extended periods of low volatility in commodity markets are typically unsustainable.

Part 8 — Composite BULLISH / BEARISH / NEUTRAL signal

Three independent technical indicators — MACD, the Stochastic Oscillator, and Bollinger Band position — are synthesised into a single headline signal badge shown prominently in the technical analysis panel: BULLISH, BEARISH, or NEUTRAL. RSI plays a supporting role as a guard, not a vote.

How the signal is determined

The composite signal uses a weighted, self-calibrating scoring model built on three indicators that are genuinely independent of each other:

Indicator	What it measures	Weight
MACD histogram	Trend momentum strength and direction	Self-calibrated*
Stochastic %K	Price position within recent high-low range	Self-calibrated*
Bollinger band position	Price position within statistical volatility envelope	Self-calibrated*
RSI 14	Overbought / oversold guard only — does not vote	—

* Weights are derived automatically from each indicator's own historical directional accuracy on that specific asset. An indicator that has been correct 75% of the time on Brent crude will receive a higher weight than one that has been correct 55% of the time. See the methodology detail below.

Why EMA cross is shown but not voted

The EMA5/EMA20 crossover is displayed in the UI because it is a widely understood and visually intuitive signal. However, it is not included as a vote in the composite score because it is highly correlated with MACD — both are derived from exponential moving averages of the same price series, so they nearly always agree. Including both would effectively give EMA-based momentum a double vote, inflating its influence beyond its true informational content.

Why RSI is a guard, not a vote

RSI is one of the most powerful indicators in the toolkit, but it is best used for its original purpose: identifying overbought and oversold extremes. Using RSI < 50 as a “bullish vote” — which was the approach in an earlier version of this system — produces misleading results, because prices in a strong sustained uptrend will consistently have RSI in the 55–68 range, which would generate a bearish vote despite the market clearly rising.

In the current system, RSI acts only as a veto gate:

What to do with the composite signal

The primary use case for the Brent crude signal is forward planning rather than instant action. Because WA pump prices lag global crude prices by 2–4 weeks:

• A BULLISH signal on Brent crude today is a warning that pump prices in Perth are likely to face upward pressure in the coming weeks. If you have flexibility, filling up your tank now or in the next few days may avoid higher prices ahead.
• A BEARISH signal on Brent crude today suggests that wholesale pricing pressures are easing. While you should not dramatically delay necessary fill-ups, conditions in a few weeks may be somewhat friendlier.
• A NEUTRAL signal means the indicators are mixed and no confident directional call is appropriate. Focus on the live FuelWatch statistics (average price, tomorrow's trend) rather than the longer-term technical picture.

Part 9 — MACD (Moving Average Convergence / Divergence)

MACD is one of the most widely used momentum indicators in professional trading, developed by Gerald Appel in the late 1970s. It measures the relationship between two EMAs — a fast one and a slow one — and adds a third layer: a smoothed signal line. Together, they create a rich picture of price momentum that is considerably more nuanced than a simple EMA crossover.

Part 10 — Stochastic Oscillator

The Stochastic Oscillator, developed by George Lane in the 1950s, takes a fundamentally different approach to measuring momentum compared to RSI. Rather than looking at the speed of price changes, it asks: where did the price close relative to the high-low range over the past 14 days? This makes it particularly effective in markets that are trading sideways or ranging — conditions where RSI can give misleading signals.

Part 11 — Average True Range (ATR)

The Average True Range, developed by J. Welles Wilder Jr. (the same analyst who created RSI), is not a directional indicator — it does not tell you whether price will go up or down. Instead, it tells you how much price typically moves in a single trading day. This is called volatility, and it is essential context for interpreting every other indicator.

Part 12 — Price distribution: IQR, standard deviation, and CV

The EconomicWatch dashboard panel now includes a Spread tile that adds statistical depth to the basic average/min/max view. Instead of just knowing the extreme prices, you can see how prices are distributed across the middle of the market.

Part 13 — Tomorrow magnitude: average ¢ move

The existing Tomorrow tile already told you how many stations are going up, down, or staying the same. The upgraded tile now also tells you by how much.

Composite signal: scoring methodology

The composite signal uses a nonlinear, self-calibrating weighted model. Each of the three voting indicators produces a continuous score on a −1 to +1 scale using a hyperbolic tangent (tanh) transform, then scores are combined with data-derived weights.

Step 1 — Nonlinear indicator scores (tanh)

A simple binary approach (“is MACD above its signal? +1, else −1”) discards the most important information: by how much. A tanh transform preserves that magnitude while naturally saturating at the extremes, preventing one very strong signal from dominating unfairly:

The amplification factors (2.5 for Stochastic, 3 for Bollinger) are chosen so readings at the conventional extreme zones (%K < 20, bbPos < 0.15) produce scores near ±0.9 — strong but not fully saturated, preserving the gradation between “near extreme” and “at extreme.”

Step 2 — Data-derived weights (rolling accuracy calibration)

Rather than using arbitrary fixed weights, EconomicWatch calculates each indicator's weight from its own historical performance on that specific asset. The algorithm:

Only periods where the indicator has a clear opinion are counted (scores with absolute value > 0.1 are included; near-zero “noise” readings are excluded). If fewer than 5 valid samples exist for an indicator, it falls back to a sensible default weight (MACD: 1.5, Stochastic: 1.0, Bollinger: 1.0).

Step 3 — Weighted composite and threshold

A normalised score of 0.35 means the weighted average across all active indicators leans 35% toward one direction. This is high enough to filter mid-range noise but low enough to respond to genuine trending conditions without waiting for unanimity.

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Limitations and how to use these tools responsibly

Every quantitative tool has limitations, and we believe it is essential to be transparent about them so you can use EconomicWatch intelligently rather than blindly.

Technical indicators describe the past

Every indicator on EconomicWatch — EMAs, RSI, Bollinger Bands, linear regression — is calculated on historical price data. They describe what has happened and extrapolate a probable direction. They cannot predict geopolitical events (a sudden OPEC production cut, a refinery explosion, a major hurricane disrupting supply), currency shocks, regulatory changes, or any other discontinuous event that breaks the historical trend.

The fuel market is not a pure free market

Western Australia's FuelWatch system introduces a government-mandated price cycle that has no equivalent in pure financial markets. Prices in Perth reset every Tuesday in a way that is entirely predictable and has nothing to do with technical indicators. Always combine the technical signals displayed on EconomicWatch with your awareness of where you are in the weekly FuelWatch cycle.

The average is only as good as the sample

As noted above, all the relative statistics (colour coding, cheapest, most expensive) are computed against the average of the stations currently visible. If you have applied narrow filters, that average may not represent the broader market. When in doubt, clear all filters and observe the full-market average before narrowing down.

Distance is straight-line, not driving distance

The Haversine distance shown next to each station is the geodetic great-circle distance — essentially how far away the station is as the crow flies. Real driving distance through Perth's urban road network is often one to three times longer, depending on the route. Treat the distance column as a useful relative ranking (station A is closer than station B) rather than an accurate driving time or fuel cost calculation.

A practical decision framework

With all of the above in mind, here is how to use EconomicWatch analytics together for a well-informed fuel decision:

1. Check the "Tomorrow" trend panel first. If 300+ stations are showing price increases for tomorrow, fill up today wherever is convenient. This is the highest- confidence, most time-sensitive signal on the platform.
2. Use colour coding to find good value in your area. Filter by your suburb or postcode, then scan for green or emerald-coded stations. A station 8 cents below average is worth a small detour for most people.
3. Look at the Brent crude composite signal for medium-term planning. A BULLISH signal on crude today suggests filling up more frequently — or running a fuller tank — over the next 2–4 weeks. A BEARISH signal suggests pricing pressures may ease.
4. Use RSI to check headroom. RSI does not vote in the composite signal, but it does block signals at extremes. A BULLISH signal with RSI at 45 has much more room to run than one where RSI is at 68 (just below the 70 guard threshold). Check the RSI value shown in the panel alongside the headline badge.
5. Inspect the individual indicator scores for confidence calibration. The composite signal is a weighted blend of MACD, Stochastic, and Bollinger scores. A BULLISH signal is most credible when: (a) the MACD histogram is positive and expanding (↑exp), (b) Stochastic %K is below 50 (ideally below 40), and (c) Bollinger band position is in the lower half of the bands. All three aligned is a high-confidence setup. Two of three is moderate. One of three alone is not sufficient to trigger a BULLISH signal under the ≥0.35 normalised threshold.
6. Check ATR before acting on the signal. If ATR is above 3% of price, the market is highly volatile and individual sessions can easily reverse a trend. Hold your signals more loosely on high-ATR days.
7. Cross-reference with the Tuesday cycle. If it is Sunday evening and the average price has been climbing all week, a big move on Tuesday is likely regardless of what the technical indicators say about global crude.

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The analytics and indicators described in this article are continuously refined as new data becomes available. The goal of EconomicWatch is to give ordinary WA drivers access to the same quality of market analysis that financial professionals use — without requiring a background in statistics or trading to benefit from it.

If you have questions about any specific metric, suggestions for additional indicators, or feedback on how the analysis could be more useful, the EconomicWatch team welcomes it.