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 [NGG22] No new position justified on a risk/reward point of view.
• RBOB Gasoline [RBG22] No new position justified on a risk/reward point of view.
• WTI Crude Oil [CLG22] 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.

Energy Geopolitics

For four days, crude oil prices continued to climb along with the European session, today. Fears about an escalation of the social crisis in Kazakhstan – which is also an OPEC+ member country with a production capacity estimated by the US EIA near 2 million barrels per day – spark in a highly flammable market. Almaty, Kazakhstan's largest city and the country's economic capital, was in the throes of unprecedented riots on Thursday that left dozens dead. Consequently, Russia sent troops to support the regime.

On the other hand, there is still a tense situation in Libya, with political tensions and delayed governmental elections, which support prices in a market already concerned by insufficient supply. Furthermore, Libya remains notably deprived of half a million barrels per day, with parts of its oil infrastructure closed, in addition to a damaged oil pipeline. The neutralization of four Libyan oil fields by men affiliated with the petroleum installation guards was to last until the presidential election, initially scheduled for December 24.

However, the latter was postponed and will not be held before the end of January, at best. Therefore, a substantial reduction in supply is likely to impact the volatility in those energy markets. They emphasize once again that supply remains the main driver of oil prices, especially when global oil demand is growing and while the production of the OPEC+ members is already struggling to ensure the expected volumes.

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

That’s all folks for today. Have a nice weekend!

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

Thank you.

Sebastien Bischeri
Oil & Gas Trading Strategist