Fundamental Analysis on April 18, 2023: Abnormal Balance in Energy Markets

The cost of oil futures on the NYMEX exchange at the beginning of the week is $82.48. Gas futures price on the same exchange at the same moment is $2.15. The ratio of oil to gas contracts is 38.36 ($82.48 / $2.15). And on Friday, it was above 40 — the last time such a proportion was in May 2012.

For many years, the oil/gas ratio has not exceeded 25-30. But a mild winter in the US, which pushed down gas prices, plus the recent OPEC+ decision on oil production caps, have all pushed the ratio to an anomaly. But it looks like it may be back to more familiar levels as the daily natural gas price chart sends two bullish signals:

1 → false bearish breakdown of the low of the year;

2 → bullish gap at the week open.

The last two long bullish candles indicate that demand is dominating. It is possible that the price may reach the psychological (3) level of $2.5 (which served as both support and resistance in March) and continue to grow — we recall that according to the forecast of the US Energy Information Administration, the gas price for 2023 should be $3.13 (almost +40% from current values).

This forecast represents FXOpen Companies opinion only, it should not be construed as an offer, invitation or recommendation in respect of FXOpen Companies products and services or as financial advice.

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