WTI Crude Oil
The WTI Crude Oil markets have been very volatile on Monday, crashing all the way to into the $55 level again before turning around to form in bit of a hammer. That of course is a very bullish sign, and at this point I think that the fall had most to do with the Russians suggested that they were going to delay the decision on cutting production. However, the $55 level has seen a lot of support before, and I think at this point it’s likely that the area will continue to be interested. If we break down below the $55 level, not only have we broken support at that point, but we have also broken below a hammer now. The alternate scenario of course is that we break above the Friday shooting star, which shows that we could go higher to fill the gap above at roughly $60.
Natural Gas
Natural gas markets gapped higher at the open on Monday, but then pulled back a little bit during most of the day only to bounce again. However, I think there is a massive amount of resistance just above, and I would also point out that the volume was very thin during Monday trading. Because of this, I think that we are going to see sellers come in on signs of exhaustion, as even though we have seen quite a bit of burning of supply, but longer-term we obviously have a lot of natural gas available for drilling, and I think it’s only a matter of time before we see this market roll over again. We are trading the winter months in the futures market right now, but before you know it, we will be rolling over to trade the spring months in the United States which will drive down demand.
