WTI Crude Oil and Natural Gas Forecast - 12 January 2017

WTI Crude Oil

The WTI Crude Oil market bounced significantly during the Wednesday session, which was a bit ironic considering that the oil markets produced a very bearish inventory number coming out of the United States. Because of this, it appears that the market had already priced a bearish number and, and perhaps this was a bit of a “sell on the news” situation. Ultimately though, I still think there is a significant amount of resistance above, especially near the $55 level. At this moment, it looks as if the market is ready to continue to consolidate between the 50 and $55 handles, meaning that short-term traders continue to push things around. Longer-term, I believe that the oversupply becomes an issue again, just as the strengthening US dollar will be.

Crude oil

Natural Gas

Natural gas markets had a volatile session as well, as we ended up essentially unchanged. We did form a bit of a shooting star though, so that suggests that there is still more than enough bearish pressure in this market to make any rally difficult. However, I do think that we need to rally, to fill the gap from the previous trading. We have come a little bit too far to the downside in a short amount of time as far as I can see, so I believe that exhaustive candles after a slight move higher will be the best way to get involved.

I think the market is going to reach down to the $3 handle, but Hollywood much rather sell at a higher level if I get the ability to. The gap above hasn’t been filled as mentioned previously, and that means we could bounce as high as $3.74 and still have a valid sell signal. The massive oversupply continues to be an issue, and I think longer-term the sellers will continue to push.

Natural gas

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.