WTI Crude Oil

The WTI Crude Oil market initially fell on Thursday just as it did on Wednesday, but then turned around to find buyers. This is probably predicated upon a softer than usual US dollar, and of course the fact that we had such a bullish move on Tuesday. The next substantial level is the $50 level, so I think we are going to continue to grind in that general direction. Given enough time, I think we will test that area and I expect to see a massive amount of selling pressure in that general vicinity. Because of this, I believe short-term traders will continue to be very bullish, but longer-term traders are waiting above to start selling again.

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Natural Gas

Natural gas markets rallied during the day on Thursday, reaching the 50-day exponential moving average. However, we are sitting just below the vital $3 handle, and this was predicated upon the natural gas inventory number coming out with less of a build than originally thought. In other words, it’s “less bad” than people expected. That is nothing to build a rally off of, and the short-term pop in the price will be sold into. This is happened time and time again in the past, and the oversupply issues in the natural gas markets are well known and documented. I think it’s only a matter of time before the sellers get involved, and the sellers will continue to punish this market and reach towards the $2.85 level underneath. After that, I think we go looking for the $2.75 level, and then even possibly the $2.50 level. I see massive resistance above, and extending to at least the $3.10 level. It is not until we break above there that I would remotely entertain the idea of buying.

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