- The oil price made a big pullback compared to the beginning of the Asian session when it was at the $85.00 level.
- The price of natural gas today formed a new September low at the $7.40 level.
- China has begun easing restrictions to combat COVID-19 in Chengdu.
Oil chart analysis
The oil price made a big pullback compared to the beginning of the Asian session when it was at the $85.00 level. We are now at the $82.00 level and are trying to find support there. We are very close to the September low at the $81.00 level, and perhaps a break below and a test of the $80.00 support zone could occur. The last time we were there was in January at the beginning of this year. For a bullish option, we need a new positive consolidation and a return to the $84.00 level. A move above would bring us back to the previous $84.00-$86.00 consolidation zone. Additional resistance at the $86.00 level is in the MA200 moving average, while the MA50 is at the $85.00 level. If we managed to climb above both resistance levels, the oil price would have a great chance to continue to the $88.00 level and maybe test the $90.00 level again.
Natural gas chart analysis
The price of natural gas today formed a new September low at the $7.40 level. The support zone at the $7.80 level was broken. On Thursday, the price was at the $9.20 level and has been in a bearish trend since then. We need further negative consolidation and a break below the $7.40 level to continue the bearish option. Potential lower targets are $7.20 and the $7.00 level, our July low. For a bullish option, we need a new positive consolidation and a return above the $7.60 level first. Then we would get minor support in the MA20 moving average. The following important target is the $8.00 level. At the same time, the additional resistance at that point is the MA50 moving average. a gas price breakout above would move us into a safer zone, and we could continue the recovery. Potential higher targets are $8.20 and $8.40 levels.
Market Overview
China has begun easing restrictions to combat COVID-19 in Chengdu, a southwestern city of more than 21 million people, helping ease concerns about demand from China’s energy consumers. China’s gasoline and diesel exports also rebounded, reducing high local inventories after Beijing imposed new quotas.