WTI Crude Oil
The WTI grade of oil initially tried to rally during the day on Monday, but turned right back around to slide through the $36 handle. This of course is a negative sign, and the market should then reach towards the $34 level in my estimation. I believe that short-term rallies continue to offer selling opportunities, as the market could eventually find itself dropping below $34 in reaction to the less than impressive stance that OPEC members are starting to take.
Ultimately, there was talk of a production freeze but with the Iranians refusing to jump on board, that all that ensures that this isn’t going to happen. Because of that, and the fact that the Americans and Canadians are both exporting tons of oil, it’s very difficult to imagine a scenario in which crude oil prices become elevated for any real length of time. Because of this, I am bearish.
Natural gas
Natural gas markets tried to rally during the day on Monday, but as you can see fell back below the $2 level by the time we were done. This of course is a very bearish sign, as we did up forming a bit of shooting star. The shooting star of course sits at the $2 level which of course also have the psychological nature behind it as well, so I believe at this point in time natural gas will start to sell off again. Regardless, it seems very likely that we are starting to run out of steam, and it is of course at the very best place to see that if you are bearish of this market.
Keep in mind that the supply far outweighs the demand, and we are starting to step away from the cold weather and the northeastern part of the United States, and that of course has a major effect on what happens with demand for this commodity.
