WTI Crude Oil
The WTI Crude Oil market rose during the day on Tuesday, as we continue to see quite a bit of volatility. However, I believe that we are going to see an exhaustive candle soon enough to start selling. While the FOMC Meeting Minutes could be very dovish for the US dollar, we also have the Crude Oil Inventories announcement coming out during the day so there are a couple of different scenarios in which traders may choose to start selling yet again. On top of that, I see that we have broken down through a nice uptrend line over the last week, and as a result I feel that the longer-term downtrend will probably continue at this point in time.
Natural Gas
The natural gas markets initially tried to rally during the day on Tuesday, but found the area above the $2 level to be resistive yet again. Because of this, I feel that the markets probably continue to drop from here and a move towards the $1.80 level could very well be the next impulsive move to be made. I believe that area will be supportive, but eventually we will break down through there and reach towards the $1.60 level below there. Ultimately, I have no interest whatsoever in buying this market because the supply is simply far too strong for buyers to overcome. The demand just isn’t there, and we are exiting the peak season as far as consumption is concerned.
With the oversupply of natural gas, it’s going to be a very long time before I can recommend buying this contract, and I believe that the fact that the $2 level has been so stubborn only puts a punctuation mark on that thought process. Quite frankly, I don’t even know what would change the situation at this point as we have seen quite a few drillers step away from the fields and yet we still have so much in the way of supply that price can’t gain for any real length of time.
