Yesterday’s oil and gas crash is the first sign of a break in the energy uptrend
Oil and gas took a massive hit during the New York trading session. Oil and gas fell sharply for different reasons, but in both cases, we could witness a bearish energy reversal after more than fivefold price gains from the macrocycle lows of April 2020.
Natural gas was momentarily losing over 20% on Tuesday on reports that Freeport LNG is set to get its terminal back online within 90 days. It is speculated that a full recovery is not expected until the end of the year, but gas futures have managed to cut losses from 20% to 18%, trading at $7.26 at the time of writing.
It’s counter-intuitive, but the gas price peaked on the day the Freeport LNG fire was announced on June 8, and from a peak at $9.6, the price has fallen by a quarter. If we do see a reversal, it would not be surprising if gas loses ground rapidly down to 6.5 or even 6.0 before the bears make their first attempts to lock in profits.
