Both crude oil and natural gas futures declined throughout Wednesday’s trading, hinting at further weakness in the fuels for the remainder of the week.
After reaching more than five-month highs on Monday, crude oil futures (April 14 delivery) are currently trading at 102.22, a 1.07% decline on the day’s open. The decline comes on the back of worse than expected employment data and the U.S. Energy Information Administration’s (EIA) weekly report.
The ADP reported a rise in U.S. private sector employment to the tune of 139K during February, falling well short of the 160K forecasted rise, while the EIA reported higher than expected oil supplies, with crude oil inventories rising by 1.4 million barrels last week versus an expected rise of 1.3 million barrels.
The main driver behind the decline in natural gas futures (April 14 delivery) was the renewed expectations of warmer weather throughout March. Currently trading at 4.575, a 1.92% decline for the day, natural gas futures are at a key level that served up strong resistance during December and acted as resistance to catalyze the rise to 6.22 during February.**relatedarticle**
Traders and investors will look to the EIA natural gas supply report, scheduled for 15:30 GMT Thursday, as an indication of near-term direction. Analysts forecast a 135 billion cubic feet decline compared to the previous week’s decline of 95 billion cubic feet.
A lower than expected decline could catalyze a break below the aforementioned support/resistance, which would suggest a carry through of the bearish momentum heading into the weekend.
In other commodities, the precious metals have recouped some of Tuesday’s losses, with gold futures (April 14 delivery) up 0.11% at 1,339.49 and silver futures (May 14 delivery) up 0.2% at 21.283.
Market sentiment concerning the situation in Russia will likely dictate gold and silver’s price heading into the weekend. Easing geopolitical tensions resulted in investors’ Tuesday switch from risk-off to risk-on trading, which, if maintained, could spell further decline during Thursday and Friday.
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