Natural Gas and Oil Analysis: Rate Cut Pause and Red Sea Tensions Stir Market

Arslan Ali
Updated: Feb 23, 2024, 11:07 UTC

Key Points:

  • Fed's hesitation on rate cuts nudges Brent and WTI crude prices down by 0.3%.
  • Waller's call for rate cut delay weighs on oil, questioning inflation's impact on demand.
  • Red Sea tensions briefly lift oil prices, highlighting global events' sway on energy markets.

In this article:

Fed’s Rate Cut Pause Signals Dip in Oil Prices Amid Global Tensions

Oil prices experienced a slight decline on Friday, with Brent crude dropping to around $83.50 and WTI crude to $78.40, each by 0.3%, following comments from Fed Governor Christopher Waller.

Waller advocated for a pause in interest rate cuts to assess whether the inflation uptick is transient or a more sustained obstacle to economic stability. Persistent high rates tend to dampen economic growth and, consequently, oil demand.

Despite these sentiments suggesting a cautious approach to monetary easing, oil prices had previously seen an uptick due to escalating tensions in the Red Sea. The situation underscores the fragile interplay between global events and commodity prices, impacting the analysis of both natural gas and oil markets.

Natural Gas Price Forecast

Natural Gas Price Chart
Natural Gas Price Chart

Natural Gas (NG) futures face downward pressure, currently at $1.7810, marking a decline of 1.60%. The day’s trading positions the pivot point at $1.8254. Should NG ascend, it would encounter resistance at $1.8899, $1.9544, and a more substantial barrier at $2.0839.

On the descent, immediate support lies at $1.7394, with further potential floors at $1.6117 and $1.5002. The 50-day EMA at $1.7641 suggests near-term support, while the 200-day EMA at $2.0603 indicates a longer-term downward trend.

The overall trajectory for NG is bearish as long as it stays below the pivot of $1.8254, pointing to a market that favors sellers over buyers at this juncture.

WTI Oil Price Forecast

WTI Price Chart
WTI Price Chart

About the Author

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.

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