Energy Prices Continue to Struggle and Some Key Levels Could be Tested

Levels in crude and natural gas continue to slide as the U.S. dollar strengthens, despite an escalation in global conflicts and winter weather on the horizon. Peter Amandio of Chicago Energies explains to TheStreet’s Jill Malandrino all the fundamental reasons for the crude market to head south are there and they could potentially test the $89 level on a longer-term chart. The front month contract is in the mid-$90s about three times now and has not been able to break to the downside because a geopolitical event has propped up pricing, but sooner or later Amandio thinks we will test those lows and look at $89. As for natural gas, utilities will start to place more demand as the winter gets closer, removing some of the weather variable. Amandio says we never tested the level of $4.09-$4.10 and the most recent low is $3.76. Options premiums in the March contract are starting to move higher from as low as 26% to 38% as winter gets closer, which means traders are expecting a lot of movement. The amount we have in storage at that time will be a key factor but traders are not too worried about that because of how quick natural gas can be pulled from the ground.

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