Natural Gas and Oil Forecast: USOIL Eyes $80 Amid Potential Bullish Reversal

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Updated: May 2, 2024, 10:06 GMT+00:00

Key Points:

Strategic reserves bolster oil stability: U.S. plans to refill reserves at $79 or lower, stabilizing prices.
Middle East ceasefire may lower oil risk: Potential peace could reduce geopolitical tensions affecting oil supply.
OPEC+ cuts support, may adjust with price rises: Continued cuts underpin prices, but high prices may lead to eased reductions.

homeMarket Overview

Oil prices rebounded on Thursday after a series of losses, driven by expectations that the U.S. might replenish its strategic reserves due to the recent price drop, potentially setting a price floor.

However, oil prices had fallen over 3% on Wednesday following the U.S. Federal Reserve’s decision to keep interest rates steady, which could hinder economic growth and reduce oil demand.

The potential for a ceasefire between Israel and Hamas, which would allay worries about Middle East oil supply disruptions, and an unexpected increase in U.S. crude inventories added to this.

Impact on Oil and Natural Gas:

Strategic Reserve Purchases: The U.S. plans to buy back oil for the Strategic Petroleum Reserve at $79 per barrel or lower, supporting oil prices.
Geopolitical Developments: The possible ceasefire in the Middle East could reduce geopolitical risks that typically support higher oil prices.
Market Dynamics: Despite the Fed’s rate decision suggesting slower economic growth, continued production cuts by OPEC+ are expected to bolster oil prices. However, if oil prices rise significantly, OPEC+ may ease these cuts, potentially capping gains.

This situation presents a complex scenario where various factors, such as strategic reserves, geopolitical developments, and OPEC+ policies, interplay to influence the oil and natural gas markets.

Natural Gas Price Forecast

Natural Gas (NG) Price Chart

Today’s technical analysis for Natural Gas (NG) on May 2, 2024, shows the commodity trading at $2.02, up by 1.30%. It hovers just above the pivot point of $2.01, indicating a potential for bullish momentum if it remains above this mark. Resistance levels are set at $2.07, $2.13, and $2.18, which need to be breached to sustain an upward trend.

On the flip side, support is found at $1.97, $1.93, and $1.89; falling below these could lead to a significant sell-off. The 50-Day Exponential Moving Average (EMA) sits at $1.97, emphasizing this key support level, while the 200-Day EMA at $2.45 suggests a longer-term resistance.

Overall, Natural Gas appears poised for further gains provided it stays above $2.01, but caution is advised as shifts below this threshold could alter the market’s direction.

WTI Oil Price Forecast

WTI Price Chart

In today’s technical outlook for USOIL, the commodity is currently trading at $79.42, slightly above its pivot point of $79.02. This positioning indicates a potential upward trend if it maintains above this level. The immediate resistance levels are set at $80.26, $81.23, and $82.56. Overcoming these barriers may signal continued bullish momentum. Conversely, support levels are identified at $78.15, followed by $77.28 and $76.53. A breach of these support points could lead to a significant downward shift in price.

Technical indicators, including the 50-Day Exponential Moving Average (EMA) at $82.17 and the 200-Day EMA at $82.42, suggest that the resistance near these averages might cap upward movements. Overall, USOIL’s market stance is cautiously optimistic above the $79.02 pivot, with a clear bearish risk if it falls below this threshold.

Brent Oil Price Forecast

Brent Price Chart

In today’s technical analysis of UKOIL, the price has increased by 0.47% to $83.92. Positioned just above the pivot point of $83.41, the current trend leans bullish, suggesting potential for further gains if this level holds. Resistance is observed at $84.71, with subsequent levels at $85.76 and $86.89 that need to be breached to confirm continued upward momentum.

Support levels are established at $82.78, followed by $81.94 and $81.08; a fall below these could precipitate a sharp decline. Technical indicators, including a 50-Day EMA of $86.75 and a 200-Day EMA of $86.96, are close to the highest resistance, hinting at significant price resistance near these averages.

The outlook remains cautiously optimistic, maintaining a bullish stance as long as the price stays above $83.41.

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About the Author

Arslan Aliauthor

Arslan, a webinar speaker and derivatives analyst, has an MBA in Finance and MPhil in Behavioral Finance. He guides financial analysis, trading, and cryptocurrency forecasting. Expert in trading psychology and sentiment.