Oil and Natural Gas: January Scenario

• During the Asian session, the price of oil fell to the $85.00 level.
• During the Asian trading session, the price of natural gas fell to the $7.80 level.
• Germany is not convinced that price restrictions on Russian gas imports would be an intelligent move, Politico reported, citing a spokesman for the German Ministry of Economy.

Oil chart analysis

During the Asian session, the price of oil fell to the $85.00 level. The last time we were there was in January of this year. Then the oil price encounters resistance at $88.00 and forms a new lower high. This is a sign that we could see a further price pullback below the $85.00 level. For a bearish option, we need a first break below $86.00, then test this morning’s low. We will see negative consolidation going forward. The potential lower target is $84.00 and $82.00 levels. For a bullish option, we need a new positive consolidation up to the $88.00 level and then a break above. Then we need to hold above in order to try to continue the bullish trend. Potential higher targets are $89.00 and $90.00 levels. Additional resistance at that level is the MA200 moving average.

Natural gas chart analysis

During the Asian trading session, the price of natural gas fell to the $7.80 level. The picture is still bearish, and we could see a further pullback to the following lower levels. We need a negative consolidation and a new pullback towards $7.80 this morning’s low. A price break below could form a new lower low. Potential lower targets are $7.60 and $7.40 levels. For a bullish option, we need a new positive consolidation to move us toward the $8.40 level. A break above would positively affect us because we would cross above the MA50 moving average. Potential higher targets are $8.60 and $8.80 levels.

Market Overview

Germany is not convinced that price restrictions on Russian gas imports would be an intelligent move, Politico reported, citing a spokesman for the German Ministry of Economy. “We remain skeptical when it comes to gas price cap issues, but in general, we are ready for discussions within the European framework,” he said. The idea of capping Russian gas prices was put forward earlier this month by the President of the European Commission, Ursula von der Leyen.