WTI Crude Oil
The WTI Crude Oil market rose during the day on Wednesday, using the $44 level as a bit of a springboard. This was mainly due to the fact that the crude inventory numbers coming out of the United States ended up showing that 3 million barrels had been used, as opposed to what they had anticipated, and the actual slow build. With that being the case, the market is very likely going to continue to see bullish pressure in the oil market, even though there is a significant amount of resistance above. I believe that the market has a lot of noise between here and the $50 level, so short-term buying opportunities will probably be the best way to go.
Keep in mind that the US dollar is falling in value as well, and that of course can put upward pressure on all commodities, as oil seems to be particularly sensitive to the value of the greenback. Given enough time, I feel that the market will more than likely find buyers below, and it is difficult to short this market at the moment. I would have to wait for a longer-term signal.
Natural Gas
Natural gas markets initially fell during the day on Wednesday, but found enough support near the $2.10 level to turn things around and form a bit of a hammer. The hammer of course is a very bullish sign and this is just below the resistance at the $2.20 level. It looks as if we are trying to build enough momentum to break above that level, and if we do we could very well find ourselves going to the $2.3 level next. I think that given enough time this market will continue to grind its way higher in the short-term, but a break down below the bottom of the hammer could send this down to the $2 handle. There is a lot of volatility in this marketplace, mainly because drillers are stepping away from the fields at the moment.
