WTI Crude Oil

The WTI Crude Oil market gapped higher at the open on Monday, as it was announced that the Saudi Arabian oil minister believes that most, if not all OPEC members are willing to extend the production cuts. The gap should now offer support, and a pullback should end up being a buying opportunity. I believe that the $50 level is going to be supportive, and a break above the top of the candle for the session on Monday would also be a bullish sign. Either way, I believe that the market should continue to go much higher, and with that being the case it’s likely that this is a “buy on the dips” situation just waiting to happen, and that the market should continue to go much higher. The $53.50 level above is my initial target. Having said all of that, the market is a bit parabolic so expect choppiness.

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Natural Gas

Natural gas markets also gapped at the open on Monday, jumping over the $3.25 level. I believe that the market should continue to go higher, and a break above the top of the range during the day on Monday should send this market towards the $3.40 level, and then eventually the $3.50 level after that. If we do pull back, I expect the $3.25 level to be supportive and it is obvious to me that the natural gas market is starting to attract more buyers. Because of this, this is a “buy only” type of situation, and I believe that we may eventually see this market try to fill the massive gap from the beginning of the year which could extend gains all the way to the $3.74 level above. It might take some time, but I do think we get there and that pullbacks continue to offer buying opportunities.

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