Crude Reverses From the Top of Its Rising Wedge as Nat Gas Sets a New Contract Low
Barchart·1d ago
Top 3 Things to Watch into the Energy Close
December crude at $101.40: A settlement back above it would make today’s drop a shakeout and could reopen $102.75 and $104.12. A settlement below today’s $99.28 low would confirm a failure at the top of the rising wedge and could open $98.84, then the 20 day at $96.78.
Tuesday’s midterms: Renewed signals of post-election strikes could send December back through $102.75. Continued progress on diplomacy could keep pressure on toward $96.78.
December nat gas at $2.95: A settlement above it would turn the break to new lows into a failed move and could force short covering toward $3.03. A settlement below today’s $2.85 low would extend the selloff into new territory.
Energy Cross Asset Note
Crude is pushing to new highs heading into the final weekend before the US midterms. A top commander briefed the president on military options Thursday, and the president keeps signaling that airstrikes on Iran could resume after Tuesday’s vote. Tehran confirmed it received the vice president’s letter, but its lead negotiator said Iran’s positions on ending the war won’t be compromised. The pressure on shipping is building again. Two more tankers were attacked around Hormuz, one by a projectile and another by a small boat that attached explosives to its hull, and Saudi defenses intercepted a Houthi drone aimed at the Mecca region. Brent is up 12% in October, heading for a fourth straight monthly gain, and the expiring December Brent contract is trading about $4 over January, a sign of how tight prompt supply is. The broader backdrop keeps prices supported. Diesel is up almost 80% this year after a record high in September, and governments are easing where they can: France cut its diesel stock requirements, South Korea loosened export curbs, and Japan is scaling back gasoline subsidies. Ukraine has reportedly paused strikes on Russian refineries until after the midterms, while Russia launched a massive overnight attack on Ukraine. Industry leaders are now saying prices no longer look temporary given how depleted global inventories are. Israel’s results show Netanyahu’s bloc short of a majority, so coalition talks will run into next week. In nat gas, Thursday’s EIA report showed an 80 bcf build against a 72 bcf estimate and a 77 bcf five-year average, the first above-average injection in weeks. More above-normal builds are expected over the next three weeks, forecasts call for warmth across the eastern half of the country through November 7, and production is running 5.5% above last year while demand is down more than 9%. Producers are starting to respond with rig cuts, and hedge funds hold a record short. Overseas demand remains strong, with Asian LNG near $33 and new buyers lining up for US cargoes. For clients, crude carries real gap risk over this weekend in both directions, and it’s sitting at the top of its recent range, so position size matters more than direction heading into the close. In nat gas, the fundamentals still lean lower, but a deeply oversold market with a record short position can produce sharp short-covering rallies, which makes chasing the lows a poor trade.
Crude Oil - The Setup
Crude Oil - The Technicals
CRUDE OIL
Current Price: December WTI (CLEZ26) $99.61, down $4.50 (4.32%) | Session high $102.75, low $99.28
Chart Setup
Friday settled at $104.12, the highest close of the move, after tagging the upper edge of the rising wedge near $105.00. Today has erased that and more. December is down $4.50 on the diplomacy report, back below the $101.40 breakout point and last week’s $100.56 low, and trading under $100 for the first time since October 22. A sharp reversal from the top of a rising wedge is the kind of move that often starts a larger pullback. The rising 20 day at $96.78 is the next real support, with the wedge’s lower boundary near $92.45 and the 50 day at $91.61 beneath that.
Key Levels Above
$104.12 (Friday settle, highest close of the move)
$102.75 (today’s high)
$102.00 (last Thursday’s settle)
$101.40 (breakout point, lost today)
$100.56 (last Thursday’s low)
Current Price: $99.61
Key Levels Below
$99.28 (today’s low)
$98.84 (October 23 low)
$96.78 (20 day)
$95.18 (October 20 low)
$92.45 (lower edge of the rising wedge)
Bias
The $101.40 breakout point is the level to manage against, now from below. A settlement back above it would make today’s drop a shakeout and reopens $102.75, then $104.12. A settlement below today’s $99.28 low would confirm the failure at the top of the wedge and opens $98.84, then the 20 day at $96.78. With the election tomorrow, headlines can swing price several dollars in either direction overnight. Sidelined buyers may get better value near the 20 day than at $99. Sellers may get a better entry on a rally back into the $101.40 to $102.00 area than at today’s lows.
Seasonal Tendencies Update
(Updated on 11.02.26)
Below is a look at historical price averages for December Crude Oil futures on a 5, 10, 15, 20, and 30-year time frames over a 6-month time frame (Past performance is not necessarily indicative of future results). Red = 5y, Green = 10y, Blue = 15y, Yellow = 20y, Violet = 30y
Natural Gas - The Setup
Natural Gas - The Technicals
NATURAL GAS
Current Price: December Natural Gas (NGEZ26) $2.93, up $0.03 (1.07%) | Session high $2.94, low $2.85
Chart Setup
Friday settled at $2.90, the first close below the old $2.93 contract low, confirming last week’s break. This morning December set a new contract low at $2.85, then bounced about 9 cents back to the old low. On the bigger picture, December has traded in a falling channel since May, and the late-October break below its lower edge, now near $3.11, sped up the selling. That edge lines up with the prior contract low at $3.10 and is the first major resistance above. Momentum is deeply oversold. All four averages are overhead, with the 20 day at $3.27 below a falling 50 day at $3.39.
Key Levels Above
$3.11 (lower edge of the falling channel, with the prior contract low at $3.10)
$3.03 (last Wednesday’s settle)
$3.00 (last Thursday’s break)
$2.95 (last Thursday’s settle)
$2.94 (today’s high, with the old contract low at $2.93)
Current Price: $2.93
Key Levels Below
$2.90 (Friday settle)
$2.88 (Friday low)
$2.85 (today’s low, new contract low)
Bias
The old contract low at $2.93 to $2.94 is the level to manage against, now from below. A settlement above $2.95 would turn the break to new lows into a failed move and, with funds holding a record short, could force covering toward $3.03. A settlement below today’s $2.85 low extends the selloff into new territory with nothing underneath. For sidelined traders, selling here is selling the low end of a deeply oversold market. A rally into $3.00 to $3.11 offers sellers a better entry with risk defined above the channel edge.
Seasonal Tendencies Update
(Updated on 11.02.26)
Below is a look at historical price averages for December Natural Gas futures on a 5, 10, 15, 20, and 30-year time frames over a 6-month time frame (Past performance is not necessarily indicative of future results). Red = 5y, Green = 10y, Blue = 15y, Yellow = 20y, Violet = 30y
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