Please note that due to market volatility, some of the key levels may have already been reached and scenarios played out.

Trading positions 

• Natural Gas [NGF22] No new position justified on a risk/reward point of view.
• RBOB Gasoline [RBF22] Long around $2.1125-2.1248 (yellow band) with stop below $2.0731 (triggered yesterday) and targets at $2.1752 & $2.2050 – See Chart
• WTI Crude Oil [CLF22] No new position justified on a risk/reward point of view.

Did you miss my last article about biofuels to diversify your portfolio? No problem, you can have a look at my selection through the dynamic stock watchlist.

Market Updates

In my previous analysis for RBOB Gasoline published last week, I attempted a trade entry around the $2.1125-2.1248 support (highlighted by the yellow band). After a modest rebound in that area last Friday, the market was pulled back down by crude. The 5% drop in the European session was caused by concerns over global demand as travel restriction measures progress in many countries. Therefore, as a result, my trade was stopped at 2.0730.

Even though several scientific reports suggest that most patients infected with Omicron present milder symptoms, energy markets overall remain concerned with the fact that some governments seem to be overreacting again. Demand for kerosene propelling commercial aircraft and other fuels may take a hit. However, there is always the possibility that cold winter temperatures will arrive and boost the demand for heating oil and RBOB gasoline.

On natural gas, the $3.604-3.716 support provided a while ago that helped us make decent profits has remained pretty sturdy since ranging prices have rebounded a number of times onto it. Such price rejections observed around a support level or demand zone may sometimes provide short-term scalping opportunities to take advantage of some quick moves.

These days, we can also witness some price downturns in various markets ahead of the Christmas holiday period. This is also due to end-of-year position closures and trade adjustments. Moreover, with trading volumes gradually declining as well, there’s an increased risk of choppy trading.

Finally, don’t forget to switch to the new front-month contracts for both WTI Crude Oil (CLG2) and RBOB Gasoline (RBG2).

RBOB Gasoline (RBF22) Futures (Continuous contract, daily chart, logarithmic scale)

Henry Hub Natural Gas (NGF22) Futures (January contract, daily chart, logarithmic scale)

WTI Crude Oil (CLG22) Futures (February contract, daily chart, logarithmic scale)

That’s all folks for today. The next oil trading alert will be published on Thursday. Happy trading!

As always, we’ll keep you, our subscribers well informed.

Thank you.

Sebastien Bischeri
Oil & Gas Trading Strategist