Oil Crash and Natural Gas Recovery – May
11

• At the beginning of the Asian session, the oil price fell to its lowest level this week to $ 98.11.
• The gas price continues yesterday’s bullish consolidation, moving today in the range of 7.22-7.50 dollars.
• The sixth package of sanctions for Russia.
• Open interest in natural gas market futures fell for the fourth consecutive session on Tuesday.

Oil chart overview

At the beginning of the Asian session, the oil price fell to its lowest level this week to $ 98.11. Positive consolidation soon followed, and the price was again above the $ 100 level. By the middle of the European session, the oil price recovered by 5 dollars, jumping to 103.32 dollars. We now have a smaller withdrawal of up to $ 102.55. the highest volatility on the oil chart was in the $ 101.90-102.10 zone, and here we can look for potential support to continue the bullish trend.

Our next target is yesterday’s high at $ 104.15. A break above would be a sign that the price has formed a bottom from which it can continue towards the previous resistance zone of $ 110.00-111.00. For the bearish option, we need to withdraw the price to the previous low of $ 98.11. If the price stays in that place longer, maybe then we will see a breakout below. Potential lower support levels are at $ 97.00 and $ 96.00 prices.

Natural gas chart overview

The gas price continues yesterday’s bullish consolidation, moving today in the range of 7.22-7.50 dollars. Yesterday’s decline was stopped at the 6.34 level, after which we had a quick recovery above the $ 7.00 price. The following important targets for tracking are first the $ 7.80-7.85 zone, then the $ 8.10-8.20. For the bearish option, we need a new negative consolidation and pullback prices below $ 7.00. After that, we can expect the descent to continue to the 6.35-6.75 support zone.

The targets below this zone are $ 6.22 and $ 5.98. Reduced demand in this period could further lower the price of natural gas, while the crisis in Ukraine and the embargo on Russian energy could have the opposite effect and increase the price of gas.

Market overview

The sixth package of sanctions for Russia

European Union Commissioner for Trade and Executive Vice President Valdis Dombrovskis spoke he still believes member states could reach an agreement on Russia’s sixth bloc sanctions package, including an oil ban. Bulgaria and several other EU member states have opposed an embargo on Russian oil imports.

Open interest in natural gas

Open interest in natural gas market futures fell for the fourth consecutive session on Tuesday. This time for about 9.2 thousand contracts, according to preliminary readings of the CME group. Volume fell by about 39.6 thousand contracts after three consecutive days of growth.

Natural gas found support close to $ 6.50, and Tuesday’s $ 6.50 drop in the region’s recovery from the region came amid declining open interest and volume, revealing a continued recovery in the very near future with the following notable goal at its current 2022 high of about $ 9.00 May 6.