WTI Crude Oil

The WTI Crude Oil market rallied a bit during the trading session on Wednesday, as we reached the middle average of the Bollinger Bands. The market looks likely to continue to try to break out to the upside, perhaps breaking above the $65 level. I think that the market is going to remain bullish, but the $63 level underneath should be supportive, and therefore we may have to test that area more than once. I believe in the longer-term uptrend, and if we can break above the $65 level, then we should continue to go much higher. Alternately, if we break down below the $63 level, the market probably goes looking towards the $60 level after that. The jobs number comes out on Friday, and it’s likely that we will see a bit of volatility in the meantime. Once the number comes out, we will be free to go higher, and the value the US dollar will either work for or against oil.

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Natural Gas

Natural gas markets collapsed during the trading session on Wednesday, slicing through the $3.30 level, reaching down towards the $3.20 level. By losing 6% during the day, it’s likely that we will continue to see more bearish pressure. It’s ultimately the end of the “high season” from what I can see, as the demand for natural gas will start to dissipate. Natural gas markets are typically bullish in the coldest months of the year, but we are getting beyond that now, as demand coming out of America will probably drop. At this point, I like selling rallies, and I recognize that the $3.50 level will probably be the high mark for the year. I believe that the next major target will be the $3 handle.

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