Will Tariff Tensions Limit Upside for Natural Gas, Oil Prices?
2025.02.06 07:45
Upon analysis of the movements by and price trends, I anticipate that the declaration of an energy emergency by US President Donald Trump has generated fresh tussles with China and European countries to remain aggressive to respond with retaliatory tariffs in response to US tariffs, imposed upon them by the US administration this year.
Undoubtedly, growing exhaustion in energy prices amid growing concerns looks evident enough to feel a surge in bearish pressure during the upcoming weeks.
Natural Gas Futures are trading below the 50 DMA at $3.447 after the formation of a bearish crossover with a down move by the 9 DMA, which came below the 20 DMA on Jan. 29 and 50 DMA on Feb. 4. Today, the natural gas futures are trading even below the 9 DMA at $3.340.
I anticipate that natural gas futures could continue this downward path if the inventory withdrawal levels remain negative, as the mild weather announcements for the second half of February 2025 could generate fresh selling sprees until the end of this month.
On the other hand, WTI crude oil futures are trading even below the 200 DMA at $73.86 after the formation of a bearish crossover by 9 DMA, and 50 DMA have come below the 200 DMA.
I find that the WTI crude oil futures could also follow a bearish path this month amid growing concerns on geo-political fronts since a new tilt in a trade war.
Undoubtedly, the WTI crude oil futures, trading at the significant support at 100 DMA at $70.94 could take a bouncing move due to the formation of a bullish Doji.
Finally, I conclude that any upward move due to temporary positive news would provide a good opportunity to take a short position in oil and gas futures, as the downside could remain bearish at the current levels.
Disclaimer: Readers are advised to take any position in oil and gas at their own risk as this analysis is only based on observations.
