WTI Crude Oil
The WTI Crude Oil market initially tried to rally during the day but found the $32 level a bit too expensive. Because of this, I feel that the market is getting ready to fall again and we should continue the downward momentum. I believe that we will reach the $28 level first, and then eventually the $26 level. Ultimately, I do think we go below there because quite frankly there is still more than enough supply out there regardless of what Saudi Arabia or Russia does. Yes, they are suggesting to the world that they are going to cut back production, but quite frankly it’s going to take quite some time to work through the overhang of supply right now in the world.
Natural gas
If there’s been one reliable trend over the last several months, it’s been that every time natural gas rallies, sellers come in and punish the market. The market is well below the $1.90 level, and I think we are now reaching towards the 1.70 level below. That was where the last low was, and I think we could even break below there given enough time. The candle during the session on Thursday was a very negative, as we closed towards the bottom of the range and that normally means that we are going to get continuation to the downside. I think rallies at this point in time will continue to be selling opportunities, and the fact that the market broke through the bottom of 2 candles during the session on Thursday tells me that the downside is most certainly picking up speed.
I have no scenario in which I'm willing to buy natural gas, and with that I think that this market will continue to offer opportunities again and again to make money selling. Ultimately, it would not surprise me to see this market try to reach the $1.50 level.
