Natural Gas Pulls Back Below The Key $9.00 Level

Key Insights

• U.S. natural gas markets are under pressure amid a strong pullback in the European natural gas markets. 
• WTI oil gains some ground while G7 ministers share some details on the proposed price cap on Russian oil. 
• Precious metals rebound as U.S. dollar retreats from highs. 

WTI Oil Rebounds After Sell-Off

WTI oil is trading above the $88 level after G7 finance ministers agreed to impose a price cap on Russian oil. The plan is to ban services for maritime transportation in case the price of the transported Russian oil exceeds the price cap.

The price cap itself (or the mechanism for setting it) has not been revealed. G7 ministers will work to finalize the details of the deal before the EU embargo on Russian oil imports begins in early December.

Russia has recently confirmed  that it will not sell oil to countries or companies that impose a price cap.

At this point, it looks that the market has not started to evaluate the potential consequences of the price cap, and WTI oil is moving higher amid a broad rebound in commodity markets.

Natural Gas Retreats Ahead Of The Weekend

Natural gas prices dived below the $9.00 level as the strong pullback in European natural gas markets continued. Reuters has recently reported that Russia’s Gazprom was set to resume Nord Stream 1 gas flows as previously planned, which served as an additional bearish catalyst for European markets.

In the U.S., the support level at $9.00 was holding well for several trading sessions, but sellers have finally managed to overwhelm buyers.

Natural gas is currently testing the support level at $8.80. In case this test is successful, natural gas will move towards the next support level, which is located at $8.50. A successful test of this level will open the way to the test of the support at the 50 EMA at $8.35.

On the upside, the previous support at $9.00 will serve as the first resistance level for natural gas. In case natural gas climbs back above this level, it will move towards the resistance at $9.35. A move above $9.35 will push natural gas towards the resistance at $9.70.

Gold Rebounds As U.S. Dollar Pulls Back From Highs

U.S. dollar found itself under pressure after the release of the Non Farm Payrolls report, which was bullish for precious metals.

Gold gained upside momentum and moved towards the resistance level at $1715. Silver managed to settle back above the $18.00 level. Platinum moved towards $825, while palladium rebounded to $2020. The rebound was strong as the precious metals segment was oversold.

Copper Found Support Near $3.40

Copper found support near the $3.40 level and rebounded towards the $3.45 level. The pullback in DXY served as the key catalyst for the move.

It remains to be seen whether copper will be able to gain sustainable upside momentum in the upcoming trading sessions as recession risks remain significant.

For a look at all of today’s economic events, check out our economic calendar.