WTI Crude Oil
West Texas Intermediate crude oil fell significantly during the trading session on Friday, as the US dollar continues to strengthen, and of course there is talk now that perhaps the production cuts coming out of OPEC’s recent meetings may be coming to an end. If that’s the case, I think you can continue to see bearish pressure, but we also have the headwind to selling due to troubles in the Middle East. The Iranian supply comes off-line, that would be bullish, but if the production cuts end ultimately, I think that this market, then you can count on somebody stepping in to pick up the slack. Ultimately, I think there is support underneath, but the selling pressure on Friday was brutal, especially late in the day. The $67 level should offer support, but if we break down below there I think we will go looking towards $65 after that.
Natural Gas
Natural gas markets did very little during the day, bouncing around the $2.90 level. I think this market is starting to run into a bit of exhaustion, but it does look as if the hot temperatures in the United States are driving prices out, and I think that eventually will go looking towards resistance at the $3.00 level. I think eventually, it will offer a nice selling opportunity but obviously in the short term it looks as if we have been very bullish and will probably continue to be so. Ultimately, I think that oversupply continues to be an issue but obviously the short-term traders are looking at the weather in the US more than anything else. Beyond that, there are some questions about gas from Russia heading to the European Union.
