WTI Crude Oil
The WTI Crude Oil market initially tried to rally during Tuesday trading, but has struggled as the $75 level has been psychologically important. Now that we have turned around from there, I think that we are starting to see a little bit of a pullback, especially considering that the US dollar is strengthening. Beyond that, there have been reports of Americans driving less, as gasoline prices are starting to take their toll. However, there are plenty of reasons to think that crude oil will continue to go higher, as we have supply disruptions in Iran, Venezuela, and of course Libya. With this, I think that a short-term pullback makes sense as we have gotten a bit overextended, but I would anticipate buyers coming back to the marketplace, especially near the $70 level. Ultimately, if we turn around and break above the $75 handle, the market could very well continue to go much higher.
Natural Gas
Natural gas markets have found a bit of support at the $2.85 level, as we hover around the 200 day EMA. As the 200 day EMA is flat, it looks likely that we will continue to consolidate overall. The $2.85 level underneath is short-term support, but if we can break down below there it’s likely that the market will go looking towards the $2.70 level, and then possibly the $2.60 level. A rally from here should find plenty of resistance near the $3.00 level above, extending to the $3.10 level. As we are roughly in the middle of the overall longer-term consolidation, I suspect that the sellers will have their way with this market given enough time. I don’t believe there’s much to break this market out of this consolidation area anytime soon.
