Natural Gas and Oil Analysis: Crude Dips Weak Chinese Exports and Potential De-escalation in Gaza

Key Insights

• Global markets recalibrate, with rate cut fervor cooling but gains holding.
• Treasury’s $112B note sale may signal bond market trend.
• U.S. crude falls below $80, eyeing Chinese exports and Gaza.
• Natural Gas technicals suggest bearish trend, RSI at 35.
• WTI Oil down, bearish under key $80.50 pivot.

Quick Fundamental Outlook

Global markets are adjusting after last week’s robust surge, moderating the enthusiastic expectations for rate cuts while still preserving most gains and welcoming a new drop in oil prices.

Investors, awaiting clear signals from the Federal Reserve and assessing Q4 data, are watching this week’s sale of $112 billion in Treasury notes and bonds to determine if October’s bond market slump was a blip or the start of a trend.

As U.S. crude dips below $80 for the first time since August, influenced by weak Chinese exports and potential de-escalation in Gaza, Treasury yields have dipped slightly, remaining significantly below last month’s highs.

Natural Gas Price Forecast

Natural Gas (NG) futures for November 7th present a bearish technical outlook, trading down by 1.38% at $3.28 within the last 24 hours. The 4-hour chart reveals a descent beneath the pivot point of $3.34, highlighting key resistances at $3.47, $3.62, and $3.79, and supports at $3.20, $3.06, and $2.90.

The Relative Strength Index (RSI) stands at 35, signaling bearish sentiment as it remains under the neutral 50 threshold. The Moving Average Convergence Divergence (MACD) further underscores the bearish trend, with the MACD line trailing below the signal line.

The 50-Day Exponential Moving Average (EMA) at $3.36, now above the current price, suggests a short-term bearish trend. The chart pattern features a bearish crossover at the 50 EMA and consecutive bearish candlesticks, reinforcing the negative bias.

The overall trend for NG is bearish, particularly if prices stay below $3.35. The short-term forecast anticipates a test of lower supports unless a reversal above this level occurs.

WTI Oil Price Forecast

In today’s technical outlook for WTI Oil, the commodity is witnessing a notable downtrend, with the current price at $79.46, a decrease of 1.83% within the last 24 hours. On a 4-hour chart timeframe, immediate support and resistance are observed at $79.05 and $82.11 respectively, with further layers at $77.44 and $83.48, extending to $76.06 and $84.73.

The Relative Strength Index hovers at 36, indicating bearish sentiment as it sits below the neutral 50 threshold, but not yet in the oversold territory. The MACD is showing signs of a bearish trend, with the MACD line below the signal. Additionally, WTI Oil’s price is trading below the 50 EMA of $82.27, reinforcing the current bearish bias.

A downward channel formation, alongside a bearish engulfing pattern, suggests a selling pressure which is further compounded if prices stay below the pivotal $80.50 mark. The overall trend appears bearish beneath this level, and the short-term forecast could see WTI Oil testing lower supports, particularly if the pivot is not reclaimed.

Brent Oil Price Forecast

As Brent oil navigates the markets on November 7th, it finds itself under pressure, trading at $83.75, marking a decline of 1.89%. The current technical framework paints a cautious picture with the price teetering around a critical pivot point at $84.86. Should the price sustain below this juncture, the immediate support at $83.22 could be the next focus, with further cushions at $82.01 and $80.63.

The Relative Strength Index, slightly above the oversold boundary at 37, reflects a bearish sentiment, yet hints at caution against immediate conclusions on the oversold state. The MACD corroborates this stance, indicating a bearish trend with the line residing below the signal.

Adding to the bearish slant is the price’s position below the 50 EMA of $86.34. Chart patterns further suggest a downward bias with a current channel pointing down and a bearish engulfing pattern reinforcing the sell-off narrative.

Looking ahead, if Brent oil remains subdued beneath $84.50, expectations of continued bearish behavior seem justified, potentially leading to further tests of support levels.

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