Oil vs Gas Technical Analysis

MacJack88 · October 20, 2021, 1:27pm

Oil vs Gas Technical Analysis Summary

Buy Stop:Above 0.644

Stop Loss:Below 0.486

Indicator	Signal
RSI	Buy
MACD	Buy
MA(200)	Neutral
Fractals	Buy
Parabolic SAR	Buy
Bollinger Bands	Buy

Oil vs Gas Chart Analysis

On the daily timeframe, SumOIL/GAS: D1 broke up the resistance line of the declining channel. A number of technical analysis indicators have generated signals for further growth. We do not rule out a bullish movement if SumOIL/GAS: D1 rises above the last upper Bollinger band and the last high: 0.644. This level can be used as an entry point. Initial risk limitation is possible below the Parabolic signal, the last three lower fractals, the 11-month low and the lower Bollinger line: 0.486. After opening a pending order, move the stop following the Bollinger and Parabolic signals to the next fractal low. Thus, we change the potential profit/loss ratio in our favor. The most cautious traders, after making a deal, can go to the four-hour chart and set a stop-loss, moving it in the direction of movement. If the price overcomes the stop level (0.486) without activating the order (0.644), it is recommended to delete the order: there are internal changes in the market that were not taken into account.

Fundamental Analysis of PCI - Oil vs Gas

In this review, we suggest looking at Personal Composite Instrument (PCI) & SumOIL/GAS. It reflects the price dynamics of a portfolio of two crude oil futures - Brent and WTI versus natural gas futures. Will the SumOIL/GAS quotes go up?

This movement means that oil is getting more expensive and natural gas is getting cheaper. U.S. The Energy Information Administration (EIA) expects to increase natural gas production from shale fields in November 2021 by 257 million cubic feet per day. The EIA also projects an average US natural gas price of $ 5.67 MMBtu (million British thermal units) for the winter period from October 2021 to March 2022. This is slightly above the current level. Starting from the 2nd quarter of 2022, EIA expects gas prices to decline by about 30% to $ 4.01 MMBtu, on average, by the end of next year. This could be facilitated by an increase in production to 96.4 billion cubic feet per day compared to 92.6 billion cubic feet per day this year. The main reason for the current rise in the price of American gas was the increase in LNG (LNG) exports. At the same time, growth in consumption within the United States is expected to be only 2% compared to last year. This forecast contributed to the correction of gas quotes. However, further on, their dynamics will mainly depend on the temperature in winter and the growth rate of production in the United States, as well as on the demand for LNG in Asian countries. The rise in world oil prices was driven by a slow increase in OPEC + production amid the global economic recovery after the coronavirus epidemic. On November 4, OPEC + will increase production by only 400 thousand barrels per day.

Mondeoman · October 21, 2021, 5:22am

Hi,
I thought this worth mentioning, since I had spent about 80% of my working life in the oil and gas industry.

One thing not understood by laypeople is the dependency on production of both these commodities. Often (but not always) a producing oilfield has gas associated with it. When oil is produced it has gas dissolved in it. At high pressure under ground, the gas is liquid. But as it flows up the well to the surface and the pressure reduces, the amount of gas per barrel of oil increases drastically. It is not uncommon to have an oilfield produce with a gas oil ratio (GOR) of 300:1. That is to say, for every barrel of oil produced, there are 30 barrels of gas produced. That gas has to go somewhere. It is also common to run power stations locally with the fuel source of gas. Now depending on economics, a country may choose to raise or lower its oil production. In the case of those oilfields that have high GOR this also impacts gas production. If you turn the valves down, you produce less gas (and can’t produce enough electricity at the power station). If you turn the valves up you produce too much gas, and you can’t run the power stations to produce excess electricity because you can’t store it.

I was visiting Abu Dhabi some years ago and the hotel experienced a power cut at 4am. It turned out that the country had agreed to reduce output of oil, and the associated gas was insufficient to provide power to all areas. So they made selective cuts to avoid system overload.

Think about this association between oil and gas production when you analyze these commodities.