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 [NG]
  No new position justified on a risk/reward point of view.
• RBOB Gasoline [RB]
  No new position justified on a risk/reward point of view.
• WTI Crude Oil [CL]
  No new position justified on a risk/reward point of view.
• Brent Crude Oil [BRN]
  No new position justified on a risk/reward point of view.

Regarding risk management, it is always best to define your strategy according to your own risk profile. For some guidance on trade management, read one of my articles on that topic.

Are you looking to diversify your portfolio while stock markets are falling? No problem, you can have a look at some of my selection of shares through the dynamic stock watchlist.

Do you want more stock articles, or any specific topic? Let me know by writing me back.

Fundamentals now look more mixed in the energy markets, since while supply remains constrained (primarily by the war in Ukraine and the sanctions imposed on Russia), demand is also showing some signs of exhaustion. Moreover, as it was the end of the quarter, we could see some profit taking happening at the end of June. Furthermore, we can anticipate sustained demand for refined products such as gasoline. If we now look closer to the supply side, we can see that there are significant interruptions in production in both Libya and Ecuador – also a support factor for oil prices.

On the one hand, after more than two weeks of blockades and violence that left six people dead, the government and the leaders of indigenous protests in Ecuador reached an agreement on Thursday to end the protests, which rose against high prices that are paralyzing the country.

On the other hand, Libya, a country endowed with the most abundant reserves in Africa but plunged into chaos since the fall of the Gaddafi regime, is struggling to emerge from its institutional crisis.

Finally, as expected, the members of OPEC+ renewed on Thursday (unsurprisingly) the objective of opening the floodgates – slightly wider – for this summer, thus agreeing to an increase in production of 648,000 barrels per day in August, as in July.

WTI Crude Oil (CLQ22) Futures (August contract, daily chart)

RBOB Gasoline (RBQ22) Futures (August contract, daily chart)

Henry Hub Natural Gas (NG) Futures (Continuation contract, daily chart)

Since natural gas futures dropped almost 20% yesterday on the NYMEX – actually, one of the biggest drops in its history! – as a larger-than-expected storage injection and an update regarding the liquefied natural gas (LNG) outage at the Freeport terminal sent prices into a free fall to levels not seen in months, I could see the next support located around the $4.527-4.574 area (highlighted on the above chart by the yellow band).

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