Natural Gas and Oil Analysis: Market Reactions to OPEC+ Decisions and Technical Trends

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Published: Dec 1, 2023, 13:11 GMT+00:00

Oil prices exhibit stabilization following OPEC+'s production cuts, with Brent crude and WTI futures experiencing modest increases amid market skepticism.

In this article:

Natural Gas

+0.79%

WTI Oil

-0.40%

Brent Oil

-0.06%

Key Insights

Oil prices stabilize post-2% Thursday drop, amid skepticism over OPEC+’s production cut efficacy.
Brent crude and WTI futures see a modest rise, despite mixed market reactions to OPEC+ decisions.
Natural Gas trades lower at $2.77, facing technical resistance levels, with a bearish RSI indication.
US Oil shows positive momentum, with a cautiously bullish trend above $75.25.
UK Oil experiences an uptick, yet technical indicators suggest a complex, cautiously bullish market scenario.

Quick Fundamental Outlook

Oil prices steadied on Friday after a 2% decline on Thursday, with doubts persisting over the effectiveness of OPEC+’s recent production cuts in boosting prices.

Brent crude futures slightly increased to $81.08 a barrel, while U.S. WTI crude futures rose to $76.27. OPEC+, responsible for over 40% of global oil output, agreed to cut about 2.2 million barrels per day in early 2023, maintaining Saudi Arabia and Russia’s existing cuts.

However, market reaction was mixed, clouded by skepticism over the voluntary nature of cuts and anticipation of deeper reductions, amid concerns about economic growth in 2024.

Natural Gas Price Forecast

Natural Gas (NG) Chart

On December 1st, Natural Gas (NG) is experiencing a slight downturn, trading at $2.77, down by 0.79%. The current price hovers below the pivot point of $2.87, with immediate resistance levels at $3.00, $3.09, and $3.22. Support is more immediate at $2.75, with further levels at $2.62 and $2.52.

The Relative Strength Index (RSI) stands at 39, leaning towards a bearish sentiment. The 50-Day Exponential Moving Average (EMA) is at $2.84, slightly above the current price, suggesting a bearish trend.

However, a triple bottom pattern observed in the chart indicates support for NG at the $2.75 level, hinting at potential resilience. Given this technical setup, the overall trend for Natural Gas appears to be cautiously bullish above the $2.75 mark, and in the short term, it may challenge resistance levels, particularly around $3.00, in a market that remains sensitive to evolving energy dynamics.

WTI Oil Price Forecast

WTI Crude Oil (WTI) Chart

As of December 1st, US Oil exhibits a positive momentum, trading at $76.19 with a 0.82% increase. The commodity is currently below its pivot point of $76.63, facing immediate resistance levels at $78.05, $79.73, and $80.96, while support is found at $75.17, $73.96, and $72.36.

The Relative Strength Index (RSI) stands at 45, suggesting a neutral to bearish sentiment. The price hovers around the 50-Day Exponential Moving Average (EMA) of $76.53, with an observed upward channel supporting a buying trend above $75.25. However, the 50 EMA suggests a potential selling trend.

Therefore, the overall trend for US Oil is cautiously bullish above the $75.25 mark, and in the short term, it’s expected to test the resistance levels, particularly around $78.05.

Brent Oil Price Forecast

Brent Oil Chart

On December 1st, UK Oil is witnessing an uptick, trading at $81.06, up by 0.83%. The commodity is currently just below its pivot point of $82.17 and is facing a series of resistance levels at $83.96, $85.65, and $87.42. Key support levels are established at $80.12, $78.46, and $76.45.

The Relative Strength Index (RSI) is at 45, indicating a neutral to slightly bearish market sentiment. The 50-Day Exponential Moving Average (EMA) stands at $81.41, suggesting a possible selling trend. An upward channel pattern is observed, supporting a buying trend over the $80.10 mark.

This contradictory signal between the 50 EMA and the chart pattern creates a complex trading scenario. Therefore, the overall trend for UK Oil appears cautiously bullish above the $80 threshold.

In the short term, the market might test the resistance levels, particularly around $83.96, reflecting the dynamic interplay of various market forces.

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About the Author

Arslan Aliauthor

Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.

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