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WTI Crude Oil
The WTI Crude Oil market rallied during the course of the session on Wednesday, as we continue to bounce around between the $36 level on the bottom and the $38 level on the top. It does look like the market is trying to break out to the upside, but in reality the $40 level is pivotal when it comes to this market. US shale oil producers have already suggested that $40 is where they’ll start piling into the market, selling quite a bit of private and of course lock in prices in the futures markets. With that, I find that it’s probably going to be very difficult for the rally to continue, and at this point in time I’m simply looking for an exhaustive candle to sell. Unfortunately, I do not have it quite yet.
Natural Gas
The natural gas markets initially tried to rally during the day on Wednesday but turned back around and form a bit of a shooting star. The shooting star of course is a negative sign, and we are in a massive downtrend. I believe that if we can break down below the bottom of the range for the day, that’s a selling opportunity. On the other hand though, if we rally from here and join an exhaustive candle, that would be reason enough to start selling as well. I have no scenario in which I’m willing to buy natural gas, because it is far too bearish for the longer term for me to even be concerned about doing so.
On top of that, the northeastern United States is entering spring, and that will be another reason to think that demand for natural gas will decline. US natural gas producers are starting to walk away from drilling at the moment, but it’s only matter of time before they reenter the market. With this, I believe the natural gas continues to be very negative.
