Why Crude Oil and NATGAS prices are rising? What is next?

Since August 20202, the crude oil price has risen because of demand. However, during covid suddenty, crude oil demand dropped. But very soon, crude oil managed to recover its market.

Since November 2020, Crude oil prices have been rising gradually following its trendline support and trendline resistance.

Everything was fine till the Russian and Ukraine crisis started. When the situation started, and till now, crude oil prices rose almost $25/barrel.

Is Russia is a factor in the rising crude oil and others fuel prices? The answer is yes. Russia is the largest exporter of fuel to the European market.

Neither the United States nor Russia has moved away; On the contrary, both sides have increased their military presence. In the meantime, the Nord Stream-2 pipelines have been under discussion for a few days.

This pipeline has been laid to take gas from Russia to Germany. However, both the United States and Germany have said that if Russia invades Ukraine, work on the Nord Stream-2 pipelines will be delayed. As a result, NATGAS prices also rose nearly $2.

Russia, Norway, Algeria, and Qatar are the four countries in the European Union that import the most natural gas. Of this, 41.1% came from Russia and 16.2% from Norway. The rest of the countries from which natural gas comes are less than 10 per cent. The same is true of crude oil.

Europen country's imports from Russia are 26.9 per cent of their crude oil. The amount of crude oil imported from any other country is not more than 10 per cent. In addition, 47.8% of timber and coal are imported from Russia. According to the European Union's 2019 update, the United States imports 16.6 per cent of this timber and coal.

This means that if Europe imposes sanctions on Russia over its attack on Ukraine, Russia alone will pay the price. In this context, we can talk about the 1967 Israel-Aber war. In the wake of the six-day war, Saudi Arabia, Kuwait, Iraq, Libya, and Algeria joined forces to cut off fuel supplies to the United States, the United Kingdom, and West Germany.

In 1963, the Arab-Israeli war broke out again. Once again, Arab countries cut off oil supplies to the United States. The reason is that the United States supplied arms to Israel.

In addition, Arab countries cut off oil supplies to the Netherlands, Portugal, and South Africa because they supported Israel. Although its impact is felt worldwide, oil prices are rising all over the world.

Though the situation is not the same right now, Arab countries are best allies with the USA and European countries. But we have to keep in mind that Rusia himself supplies 41.1% crude oil to Europe. So, only the Arab countries won't tackle that demand and situation.

So as long as this crisis won't finish or world leaders won't reach a solution, it is expected that the crude oil and NATGAS price has more chances to rise in the upcoming days.

If you are a crude oil and NATGAS trader, you should always keep in touch about the Russian and Ukrain issues. As these commodity prices stay in pick, any developing news about the Russia and Ukraine crisis may decrease crude oil and NATGAS prices.


Crude Oil Technical Analysis

Crude oil is hovering nearly its trendline resistance zone. The present rate, trendline resistance, is identified at $93/95/barrels. So, unless the crisis accelerates, we may see some correction from the trendline resistance level.

$77 is identified as trendline support from the current level. If the market goes for correction, it may test the $77/75 price zone. As long as crude price holds above the $75 price zone, it still is an uptrend. So, we may see another upward lag from the $77/75price zone.

Our final upside target is $100/107price zone this year. It may take time to see the crude oil price above $100. But if what won't solve the Russia and Ukraine issue and accelerates more, it is just a matter of time before the crude and NATGAS price will spike to the upside.