WTI Crude Oil
The WTI Crude Oil market fell initially during the day on Thursday but found the $38 level supportive enough to have the market bounce and form a hammer. This of course is a very supportive candle, so it’s likely that the buyers will return, at least for the short-term. I believe that eventually we will see the sellers return though, however I have to admit that it has been quite interesting to watch how bullish this market has been recently. After all, we have a massive amount of oversupply and even though there is talk of a production freeze, that has no bearing on the Americans or Canadians and what they do. With this being the case, you have to set up and take notice of the hammer though, and as a result I think today will be relatively positive.
Natural Gas
The natural gas markets rose during the course of the session on Thursday, but could not hang onto the gains for any significant amount of time. That being the case, it looks as if we will more than likely continue to see quite a bit of volatility but I think there is going to be selling pressure above that will continue to work against the value of natural gas. After all, most of the rally during the course of the session on Thursday was due to the fact that the build and natural gas inventory was “less bad” than expected. With 15,000,000,000 ft.³ added to storage, even though it wasn’t as bad as the 20,000,000,000 ft.³ expected, the reality is that it’s still pretty bad.
I think there is a massive amount of resistance all the way up to the $2 level, so I’m simply looking for some type of exhaustion in order to start selling again as the market should continue to grind its way down to the $1.60 level.
