WTI Crude Oil
The WTI Crude Oil market went back and forth during trading on Friday, as we have gotten a bit overextended. We are finding resistance at the $72 level, but we have clearly broken above significant resistance at the $70 level. I think that the $70 level will offer support, and I think that the buyers will be interested in going long at that point. If we were to break down below the $70 level though, I think that we could unwind towards the $68 level. Ultimately, tensions in the Middle East and of course the Iranian deal melding down will of course affect a significant portion of supply. Ultimately, every time we pull back it should be a nice buying opportunity in the short term, as we have seen the massive uptrend line offer support and confidence.
Natural Gas
Natural gas markets tried to rally during the session on Friday but found resistance at the top of the uptrend channel that has been a factor in the market for a couple of months now. If we can break above the $2.85 level, we could go to the $2.90 level, and that eventually the $3.00 level. Ultimately, if we break down from here I think that the $2.80 level will offer support, followed by the $2.78 level. A breakdown below that level would have the market looking towards the bottom of the channel. I think natural gas is getting a little bit overextended, so I would anticipate some short-term softness, but I also believe that the buyers will return if we get a little too negative. A break above the top of the uptrend in channel would be a significant boost to the momentum.
