Key Insights
- Middle East conflict minimally impacts oil output, driving a dip in USOIL and UKOIL prices.
- Natural Gas falls 6.19% to $2.74, with a bullish outlook above $2.72.
- Red Sea tanker disruption and Libyan protests add complexity to the oil market.
Quick Fundamental Outlook
Oil prices experienced a decrease on Monday due to the limited impact of the Middle East conflict on crude production, leading to profit-taking after gains last week. Tanker navigation in the Red Sea was disrupted, with some changing course due to strikes against Houthi targets in Yemen.
This conflict, however, has not significantly affected oil production, leading to a modest geopolitical risk premium in oil prices. As a result, USOIL and UKOIL saw a downward trend.
Additionally, the conflict has delayed at least four LNG tankers, indirectly tightening the natural gas market by extending shipping durations and keeping significant volumes at sea. Meanwhile, in Libya, potential shutdowns of oil facilities amid protests add to the complexities in the oil market.
Natural Gas Price Forecast
On January 15th, Natural Gas (NG) witnessed a significant decline, dropping 6.19% to $2.74. The 4-hour chart indicates a pivotal point at $2.72. Natural Gas faces resistance at $2.86, with further barriers at $2.98 and $3.12.
On the downside, support levels are found at $2.59, $2.48, and $2.35, which could offer potential relief in case of continued declines. Technical indicators show the 50-day Exponential Moving Average (EMA) at $2.77 and the 200-day EMA at $2.70.
Notably, an upward trendline is providing support near the $2.70 mark. A closure above this level could signal a shift towards a buying trend. Currently, the trend for Natural Gas is bullish above the $2.72 mark.
WTI Oil Price Forecast
On January 15th, US Oil experienced a slight decline, closing at $72.28, down 0.57%. The 4-hour chart shows a pivot point at $72.91, with immediate resistance levels at $74.21, $75.15, and $76.10. The supports are positioned at $71.61, $70.28, and $69.27.
Technical analysis reveals that US Oil is trading below both the 50-day and 200-day Exponential Moving Averages (EMAs), currently at $72.55 and $73.69, respectively. This positioning suggests a selling bias in the market.
West Texas Intermediate (WTI) closing below these EMAs is indicative of a bearish sentiment. The trend for US Oil appears to be bearish below the $72.90 mark.
Brent Oil Price Forecast
On January 15th, UK Oil registered a slight decrease, closing at $77.77, a drop of 0.43%. Analyzing the 4-hour chart, the pivotal point is established at $78.58. UK Oil encounters immediate resistance at $79.27, followed by higher levels at $80.19 and $81.44.
On the support front, the levels are marked at $76.48, $75.19, and $73.97, delineating potential zones for the price to stabilize or rebound. The technical indicators suggest a cautious outlook. The Relative Strength Index is near the midpoint at 49, neither indicating overbought nor oversold conditions.
The 50-day and 200-day Exponential Moving Averages (EMAs) stand at $77.95 and $77.77, respectively, with UK Oil closing slightly below these averages, hinting at a prevailing selling bias. Conclusively, the current trend for UK Oil appears bearish below the $78.58 threshold.
