The current energy uptrend started with the Russian invasion of Ukraine on February 24, 2022, and looks ready to end soon as the G7 nations have agreed on Friday to cap Russian oil prices.
Undoubtedly the WTI Crude oil futures had entered a bearish territory since Russia announced to shut Nord Stream 1 pipeline for an undisclosed period as it found leaks during maintenance.
On Thursday, the commodity tested a new low at $81.20 before some price reversal and currently trading at $84 but still inside the bearish territory.
The steep fall in oil prices compelled the futures to trade below 200 DMA in a daily chart since August 1, 2022.
Undoubtedly, this breakdown by the WTI Crude oil signaled an advent of a selling spree in the natural gas prices as the Natural Gas Futures started to follow this weakness on August 17, 2022, despite hitting a seasonal peak on August 23, 2022, at $10.005.
Now the WTI Crude oil seems to be a canary in the coal mine, as the natural gas futures are showing extreme selling pressure during this week.
On Thursday, natural gas tested the day’s low at $7.774 but found a steep reversal and are currently trading at $7.889. In a daily chart, the formation of an exhaustive candle inside the ‘Ichimoku Clouds’ looks evident enough for the continuation of current exhaustion on Friday too.
Finally, I conclude that if the Natural Gas Futures could not be able to defend the lower end of the ‘Ichimoku Clouds’ in a daily chart on Friday, current exhaustion could turn into a steep fall during the upcoming week.
Disclaimer: The author of this analysis does not have any position in Natural Gas futures. Readers are advised to take any position at their own risk; as Natural Gas is one of the most liquid commodities of the world.