WTI Crude Oil
The WTI Crude Oil market fell significantly during the session on Friday, testing the $40 handle. That being the case, it looks as if the markets are trying to settle down ahead of the meeting in Qatar over the weekend, which would tell us what the oil producing countries are going to do. Currently, it appears that they are trying to settle on some type of output frees, but quite frankly I feel that we may have already priced that into the marketplace. So having said that, it appears that if we break down a bit we could very well continue to go much lower based upon news from that meeting. Perhaps they don’t get anything accomplished, that would be an extraordinarily negative factor. Because of this, I feel that a move below $40 will probably send sellers into the market again.
Natural Gas
The natural gas markets fell during the day as well, testing the $1.90 handle. That being the case, the market looks as if it is ready to continue going lower, and a move below the bottom of the range for the session on Friday would be reason enough for me to start selling again, as we should reach towards the $1.80 handle. On the other hand, if we rally from here I believe that there will be plenty of sellers above and on exhaustive candle I would be more than willing to short this market as well, especially considering that the longer-term trend is most certainly to the downside.
On top of that, it’s very likely that the markets will have to deal with lower demand due to the fact that places like New York, Boston, and Washington DC are all exiting cold-weather, and will demand less natural gas to heat their homes. Lower industrial output also will hamper the demand for natural gas. I am a seller.
