Oil & Gas Prices

[dan_s]

It looks like the $92/bbl support level for WTI has held again. It was tested this morning. A close today close to $93 would be encouraging.

Natural gas is getting more interesting. This Thursday's storage report could show a record draw, the second record breaking draw this winter. Plus, we have a new cold wave moving into Chicago. It is expected to get down near freezing in Houston later this week. What happened to Global Warming?

[dan_s]

Another analyst's opinion: "The variation of predictions among analysts on crude oil prices through the rest of the decade is wide. Ed Morse, the commodities research chief at Citi, expects crude prices to average $80/bbl through 2020. Oswald Clint at Sanford Bernstein projects nearly double that at $158 a barrel in 2020. I expect that short-term fundamentals are going to favor the lower end of that divide, but we will break to the high side by 2020. Global oil production still has some expansion left, but if it slows before 2020 and demand in developing countries continues to grow at the pace of the past decade, crude prices will break to the upside."

My opinion remains that the global economy is improving and demand for crude oil will pick up the second half of this year. I do think we may test support at $84 in Q2, but oil should not stay in the $80's for long.

[dan_s]

WTI opened at $91.51/bbl this morning and closed over $92.50/bbl. Each close over $92 increases the strength of that support level.

[setliff]

Cl is rallying, as is Ng and e&p's for the most part are not--go figure.

[dan_s]

Bullish liquids inventory report this morning. IMO a close above $94/bbl is very bullish as that is a resistance level going up and a support level once prices move above it.

If you look at a three year chart for WTI you can clearly see that the wedge pattern is still very much intact. The $92 support level now looks very strong.

It will be tested Big Time in Q2.