WTI Crude Oil
The WTI Crude Oil market initially fell during the day, dipping below the $42 level on Wednesday. However, the buyers returned and pushed the market towards the $44 handle. At this point in time though, the question then remains whether or not this rally is based upon anything in reality. Yes, we are trying to rebalance the oil markets, but the sudden surgeon volatility has caught most analysts by surprise. At this point in time, the market is certainly showing signs of strength and it is impossible to sell. In fact, we are probably going to have to see some type of longer-term signal in order to do so. Having said that, short-term buyers may profit by picking up on short-term pullbacks, as has been the case recently.
Natural Gas
Natural gas markets got a bit of a boost during the day, mainly in reaction to the crude oil markets as they do sometimes tend to move in tandem. Having said that, there’s nothing to suggest that natural gas prices should go higher, and the fact that we formed a shooting star for the day of course does show that there is a significant amount of bearish pressure above. On a break below the bottom of the range for the Wednesday session, that’s classic sell signal, but do recognize that there is a lot of noise between there and the $1.90 handle. Going forward it would be bearish but I imagine it will be very choppy. I don’t really like buying anyway, so at this point in time that’s about the only trade that I see. Yes, natural gas has been very bullish lately but at the end of the day there’s still a massive amount of overhang in the marketplace, and with that being the case I think it’s simply a matter of waiting to get decent selling opportunities in order to profit here.
