WTI Crude Oil
The WTI Crude Oil market continues to show strength during the session on Monday, as we broke above the $40 level. Ultimately, there is quite a bit of resistance above at the $42 handle, and although we show quite a bit of strength, I am a bit hesitant to get too excited about this move. Yes, I believe that we do continue higher today, but in the end a lot of this is based upon optimism of the upcoming April 17 meeting held by oil producing countries. If a proposed production freeze does in fact happen, the question then becomes whether or not the market will continue to go higher based upon any decision made in favor of doing so. I believe that the market is essentially “front running” that potential decision. I believe that an exhaustive candle in this area would be a selling opportunity, but for the next several days you would have to think that the optimism should continue. On the other hand, if they do not announce a production freeze, this market will turn right back around.
Natural Gas
The natural gas markets fell during the course of the day on Monday, testing the $1.90 level. This is a market that continues to find plenty of bearish pressure, and a move below the $1.90 level seems to be a signal to continue selling. On top of that, any short-term rally will more than likely be a selling opportunity, especially on signs of resistance near the $2.00 handle. After all, that’s an area that has been resistive and of course is a large, round, psychologically significant number which of course always attracts a lot of attention. I have no scenario in which I am willing to buy this market, and I believe that eventually the sellers will take over yet again, as the downtrend has been massive. At this point in time, the supply still far outweighs any demand.
