Crude oil and natural gas futures are sharing a similar pattern this week. Both markets reached their lows early on before sitting in a range the rest of the week. The chart patterns suggests investors are playing the waiting game. Crude traders are waiting for the start of the OPEC-led production cuts on January 1. Natural gas traders are waiting for a possible return of cold weather next week-end. So basically, we’re looking at chart patterns that suggest investor indecision and impending volatility.
There has been very little news this week, which is typical of the holiday season. Helping to limit gains are concerns over the partial government shutdown that may not come to an end until January 4, and renewed concerns over the trade dispute between the U.S. and China. Investors are also worried about the supply glut and whether the OPEC-led production cuts will help trim the excess and stabilize prices.
A strong recovery in U.S. equity markets helped oil prices recover on Wednesday, but a bearish inventories report on Thursday from the American Petroleum Institute pushed prices lower. Another dramatic turnaround to the upside in the stock market is helping to provide some light support on Friday shortly before the release of the U.S. Energy Information Administration weekly inventories report.
U.S. West Texas Intermediate and international-benchmark Brent…