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Oil and Gas: Are We Waiting for the Worst Weekly Drop?

  • The price of oil rose on Friday on bets that OPEC+ will discuss output cuts at their Sept. 5 meeting.
  • The price of natural gas advanced to the $9.40 level yesterday.
  • The flow of natural gas through the Nord Stream 1 pipeline will be restarted today after the three-day maintenance announced by Gazprom in August.

Oil chart analysis

The price of oil rose on Friday on bets that OPEC+ will discuss output cuts at their Sept. 5 meeting, but the benchmarks were still on track for their worst weekly drop in four weeks on concerns that China’s curbs against COVID-19 and weak global growth will hit demand. Yesterday, the price fell again to the $86.00 level, after which we saw a recovery during the Asian session to the $89.35 level. We now need to hold above the $88.00 support level in order to continue the rally above the $90.00 level next week. For a bearish option, we need a new negative consolidation and a new price pullback to the $86.00 level. Below, we can expect increased pressure, which would lead to a break price of oil. Potential lower targets are $85.00 and $84.00 levels.

Oil chart analysis

Natural gas chart analysis

The price of natural gas advanced to the $9.40 level yesterday, after which a pullback occurred to the $9.20 level. During the Asian session, the price managed to maintain at that level, and in the European session, it made a break below, and now we are looking at the $9.00 level as the next target and potential support. We need a negative consolidation and a drop to the $9.00 support level to continue to the bearish side. If staying at that level lasts longer, a break below could happen. Potential lower targets are $8.80 and $8.60 levels. For a bullish option, we need a positive consolidation that would bring us back above the $9.20 level. After that, the price of gas would have a better chance of continuing to recover. Potential higher targets are $9.40 and $9.60 levels.

Natural gas chart analysis

Market Overview

The flow of natural gas through the Nord Stream 1 pipeline will be restarted today after the three-day maintenance announced by Gazprom in August. The gas flow will now be at the same level as before the temporary shutdown. European leaders voiced their fears last time in July when Nord Stream 1 was shut down for annual scheduled maintenance.

OPEC+ is expected to keep its October crude oil production target at the same level as the September quota after the group’s meeting on September 5.



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