WTI Crude Oil
During the session on Friday, we found quite a bit of resistance above the $54 level, as we have several times. It looks as if the $55 level above is the top of the overall consolidation area, and thus it’s likely that the market will continue to struggle. If we broke above the $55 level, the market should then continue to go higher and perhaps reaching towards the $60 level. If we do fall, there should be a significant amount of support at the $52 level, and then the $50 level. Ultimately, this is a market that is very choppy and because of this it’s likely that the short-term traders will continue to go back and forth, pushing this market in various directions at various times. Longer-term, I feel that the market should continue to be concerned about oversupply issues.
Natural Gas
The natural gas markets broke down on Friday, slicing through the $3.10 level to reach towards the $3.00 level. The $3 level should be an opportunity to break down even further if we can get below there, and perhaps reach towards the $2.60 level. However, there is a significant amount of support at this area, especially when you look at the longer-term charts. A bounce from here could be a nice selling opportunity based upon exhaustion though, especially considering the $3.25 level above. I believe that the natural gas markets have peaked, as there is a significant lack of demand coming out of the United States. Before you know it, the markets should do with the fact that it’s becoming warmer out, and that will drive down the value of this commodity.
I don’t really have a scenario in which I am willing to buy this market, and I believe that the higher it goes, the more interested various traders will be in jumping into this market.
