For some time now the Russia/Ukraine conflict (from a financial market perspective) has been on the "back burner" as the Geopolitical conflict in the Middle East took center stage.
That has been changing recently and not least over the weekend with the escalation seen inside Russia.
Could that be part of the renewed bid tone on Oil? Certainly, right now there has not been a strong economic reason for the move higher in Oil and as yet we have not seen the Iranian "retaliation" (Although that does look to be drawing close now)
The chart on European Natural Gas is further giving rise to concern. Today, as I write it is up over 3% and will post a bullish outside day on a close over EUR 40.75.
In addition, it is up 41% low to high in the past 5-weeks and up 92% low to high from the February low. Let us not forget that before this conflict it had only once exceeded EUR30 in the last 20 years (2008) and that ended well (not) in pushing J C Trichet into a more hawkish stance at the ECB.
Levels to watch here are EUR 45.13 which is the 76.4% pullback of the last fall (Log chart) and EUR 48.13 (76.4% on linear chart)
However, the big level is EUR 56.10 (Oct 2023 high). A decisive break above there, if seen, would complete a major double bottom and signal a potential move towards EUR 90.
So, in answer to the title of this piece Should We Be Concerned? The answer is YES.
