Last week WTI closed with a white spinning top, following Thu's decline from ~8350 resistence. This implies an equilibrium was reached between bears and bulls, and when taken in the context of Thu's decline, suggests there will likely be another test of noted resistence in the trading days ahead. Thu and Fri price action took some of the 'heat' out of the overbought condition as indicated by the Percent R trend indicator. A close above 8350 could see a spec run higher as was seen on Mon and Wed last week. A continuation of the contemporary weakness in the USD would be supportive of an overall higher crude curve. In the bearish case, a close below 8200 could result in the front contract falling to 7800-7600 support. Product crack spreads and fundamentals are not supportive of a higher crude price.
The nearby NYMEX natgas contract closed last week with a moderately bullish dark hammer, although it closed just below current trend line support. If price action over the next few trading days is unable to close above 580, a continuation of the declines seen on Thu and Fri is likely, with ~550 representing support. The lowish inventory draw last week and the above normal weather temperature outlook for the U.S. central northeast will weigh heavy on Henry Hub prices early in the new week.
Last week WTI closed with a white spinning top, following Thu's decline from ~8350 resistence. This implies an equilibrium was reached between bears and bulls, and when taken in the context of Thu's decline, suggests there will likely be another test of noted resistence in the trading days ahead. Thu and Fri price action took some of the 'heat' out of the overbought condition as indicated by the Percent R trend indicator. A close above 8350 could see a spec run higher as was seen on Mon and Wed last week. A continuation of the contemporary weakness in the USD would be supportive of an overall higher crude curve. In the bearish case, a close below 8200 could result in the front contract falling to 7800-7600 support. Product crack spreads and fundamentals are not supportive of a higher crude price.
The nearby NYMEX natgas contract closed last week with a moderately bullish dark hammer, although it closed just below current trend line support. If price action over the next few trading days is unable to close above 580, a continuation of the declines seen on Thu and Fri is likely, with ~550 representing support. The lowish inventory draw last week and the above normal weather temperature outlook for the U.S. central northeast will weigh heavy on Henry Hub prices early in the new week.