WTI Crude Oil
The WTI Crude Oil market initially tried to rally on Thursday but after a bearish inventory number coming out of the United States, the market rolled over and ended up forming a shooting star yet again. The $51 level underneath should continue to be supportive, and thus there is quite a bit of volatility all the way down to the $50 level. Rallies of this point in time should be selling opportunities, as I believe the market is finally starting to focus on the oversupply issue. The US dollar rallying has of course worked against the value of oil as well, and I think we are starting to see real weakness slip into the marketplace as oversupply becomes increasingly apparent.
Natural Gas
Natural gas markets bounced off the 3.25 level rather viciously as the inventory number was a lot more bullish than people would have expected. Because of this, I think that the market within reach towards the 3.50 level above. That’s an area where we begin a significant gap though, so we can break above there I think we will fill that gap and reach all the way to the 3.73 level. Ultimately, this is a market that should continue to see quite a bit of volatility but I do not like natural gas longer-term. I realize that sooner rather than later the weather will turn in the northeastern part of the United States, offering less demand for the commodity.
The one thing natural gas is going to be is massively volatile. I don’t think that’s can a change any time soon, so you going to have to be able to deal with that type of noise. Longer-term I still believe that there is a lot of negativity in this market, but obviously, we still have a lot of fighting to do. Filling the gap typically happens, so if that happens we could get a short-term pop that traders will take advantage of.
