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Oil and Natural Gas: Dramatic price drop

  • Yesterday, the price of oil dropped drastically from $111.60 to $97.45.
  • During the Asian trading session, the price of natural gas recovered after falling to a new July low of $5.28 yesterday.
  • Austria will encourage industry and utilities to use alternative fuels such as crude oil.

Oil chart analysis

Yesterday, the price of oil dropped drastically from $111.60 to $97.45. In those few hours, the price lost $12.65 of its value. During the Asian trading session, the price managed to recover to $102.00 but once again retreated to support at $100.00. for now, we are moving sideways in the $100.00-$102.00 range. For the bearish option, we need a continuation of the negative consolidation, and we could once again visit yesterday’s low at the $98.00 level. A potentially more serious lower target is $95.00. We need a new positive consolidation and a jump above the $102.00 level for a bullish option. After that, with further bullish consolidation, oil price could continue up to the $106.00 level, the previous support zone.

Oil chart analysis

Natural gas chart analysis

During the Asian trading session, the price of natural gas recovered after falling to a new July low of $5.28 yesterday. Now we are moving into the zone around the $5.60 level, and we need a break above it for further continuation of the price recovery. The next target is the $5.80 level before we try to climb up to the $6.00 level. Additional resistance at that level is in the MA200 moving average. A price break above would further strengthen the bullish trend, and further recovery could be seen. We need a negative consolidation and a drop below the $5.40 level for a bearish option. After that, the price could continue to decline to the $5.20 and $5.00 support zones.

Natural gas chart analysis

Market overview

Austria’s energy minister said he intends to order industry and utilities to switch from using natural gas as he seeks to build up more natural gas supplies to insulate against supply cuts from Russia, Reuters reported on Tuesday.

Austria will encourage industry and utilities to use alternative fuels such as crude oil, Austrian Energy Minister Leonore Gevesler said.

Austria gets 80% of its natural gas from Russia. And while its electricity is produced mainly from hydropower, its industrial sector and utilities use a significant amount of natural gas.

Russian President Vladimir Putin stated at the end of May that Russia would continue to fulfill its obligations regarding natural gas supply to Austria. Austria’s OMV opened a ruble account with Gazprombank to pay for Russian gas imports, but gas supplies fell by 50 % in June after Gazprom said it would cut gas supplies.



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