WTI Crude Oil
Crude oil markets got a bit of a boost during the session on Wednesday, as the inventory number was a lot more bullish than anticipated. However, we are starting to see a significant barrier at the $52.50 level, so I think what we’re going to be seen over the next couple of days is consolidation, and perhaps an attempt to break out. Pullbacks of this point could be thought of as value, but if we were to drop below the $49 level, that would kill the uptrend, at least for the short term. I believe that the crude oil markets will continue to be almost impossible to hang onto for any significant amount of time, because it’s moving on speculation of headlines more than anything else anymore. OPEC has been neutered, but at the same time the Russians have started to jump into the fray for the possibility of cutting production. However, on the other side of the coin when prices rise, Americans let the market will supply. Because of this, volatility is going to remain extraordinarily high in this market and therefore unless you have the ability to trade short-term back and forth type of situations, you are best on the sidelines.
Natural Gas
Natural gas markets are completely different animal altogether. We have a clear oversupply of natural gas, and every time we get close to the $3 handle, suppliers flood the markets. I think that’s going to continue to be the theme here, as natural gas markets bounce between the $3 level on the top, and the $2.85 level on the bottom. We broke down significantly during the day on Wednesday, so I think a bounce might be coming. However, I’m looking at that bounce as a potential selling opportunity yet again.
