Crude oil and natural gas futures posted similar moves this week. Both markets surged to the upside to levels not seen since June. Both of their rallies came close to triggering strong breakouts to the upside and both of their moves ended with violent closing price reversal tops on the daily chart.
This trading pattern typically indicates the selling is greater than the buying and that the crude oil and natural gas markets are still being controlled by strong-handed short-sellers.
The final blow to the bullish traders will be closing price reversal tops on the weekly chart. Crude oil currently trading lower for the week after the strong rally earlier in the week. And there is enough downside momentum in natural gas to turn this market lower for the week also.
Weekly September Natural Gas Recap
Natural gas futures are trading lower early Friday. Sellers took out the previous day’s low, confirming the closing price reversal top and setting up the market for a 2 to 3 day correction into at least $2.966 to $2.934.
Prices rose slightly following the release of the weekly government storage report on Thursday before sellers slammed the futures contract into the close. This happens often because the storage report is old data and traders are already looking ahead at new data like a weather report.
According to the U.S. Energy Administration (EIA), utilities added 28 billion cubic feet (bcf) of gas into storage during the week-ending July…