Oil and gas production may be hit by hurricane in the Gulf of Mexico
Their upward move means that natural gas is in higher demand than oil. This PCI showed strong growth in mid-April of this year, during the 1st wave of coronavirus. Later, it corrected downwards. A similar surge is possible if there is a second wave of coronavirus. In this case, the demand for oil and motor fuel may decrease as lockdowns resume and traffic flows decline. In theory, the demand for gas can be reduced to a lesser extent, since it is used for winter heating and power generation. According to the U.S. Energy Information Administration (EIA), US oil reserves are now 12.4% higher than the 5-year average, and natural gas reserves are about the same – higher by 12.1%. Both types of raw materials are rising in price against the backdrop of Hurricane Delta in the Gulf of Mexico, which interferes with the operation of oil and gas production platforms. The growth of liquefied gas (LNG) exports by more than 20% compared to last year is helping to increase natural gas prices.
Summary of technical analysis
|Buy stop||Above 1.306|
|Stop loss||Below 1.023|
Market Analysis provided by IFCMarkets.com
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