One of the casualties from the recent market correction is energy.
In particular, a contraction of economic activities is expected to hit energy demand. Hence the downward spiral in energy-related commodities, such as crude oil and natural gas.
WTI crude oil prices have slumped from $65 to $50 a barrel. This correction has unwound the majority of its gains accumulated during Jan-Jun (see below). But some technical sideways support is noted at around $50, the key psychological round number level.
Natural Gas suffers from an even bigger decline. Prices have sunk to the lowest level in years (see below). It is reported that the supply of the commodity is rising, thus causing prices to contract beneath $2.400 per million British thermal units.
Technically, the energy price picture is bearish, although their downtrends are becoming oversold. In markets what is oversold can become even more oversold in the near term. Watch for a base to develop before buying.
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