Key Insights
- U.S. oil production surge and Gulf Coast pipeline activity boost WTI prices.
- OPEC’s positive demand forecast for 2024-2025 supports Oil market stability.
- Red Sea disruptions and geopolitical tensions underpin oil price resilience.
Quick Fundamental Outlook
Rising oil production in the U.S. and busy pipelines to the Gulf Coast are pushing up the prices of U.S. crude oil. Specifically, West Texas Intermediate (WTI) crude is trading at higher prices in Houston than in Midland, Texas, showing strong demand and efficient transport.
Moreover, OPEC’s optimistic outlook on oil demand growth for 2024 and 2025 is also keeping Oil price supported. OPEC expects a demand increase of 2.25 million barrels per day (bpd) in 2024 and 1.85 million bpd in 2025.
Geopolitically, disruptions in the Red Sea, including attacks on ships by Yemen’s Houthi rebels, are affecting oil shipping routes and costs, keeping oil prices from dropping further. The U.S. responded with strikes against Houthi targets in Yemen.
The American Petroleum Institute reported an unexpected rise in Weekly Crude Oil Stock, now shifting the focus on EIA Crude Oil Inventories that are due today.
Natural Gas Price Forecast
Natural Gas (NG) is currently experiencing a slight decline, down by 0.31% to $2.5875. The four-hour chart indicates a pivotal moment, with a pivot point at $2.6871. Resistance is observed at $2.8113, with further ceilings at $2.9777 and $3.1195.
Supports are closer to $2.5189, and if breached, we could see further tests at $2.3538 and $2.2092. The 50 and 200-day Exponential Moving Averages, at $2.6885 and $2.6926, respectively, have undergone a bearish crossover, suggesting potential downward pressure at these levels.
Moreover, the previously broken upward trendline is anticipated to act as resistance, reinforcing the bearish outlook. The overall trend for NG remains bearish below $2.6871, with expectations that resistance levels will be tested in the coming sessions.
WTI Oil Price Forecast
US Oil (USOIL) has ticked upwards by 0.47%, with a current price of $73.03. The four-hour chart shows a pivot point at $73.48, indicating immediate resistance levels at $74.21, $75.15, and $76.15.
On the downside, support levels are placed at $71.73, followed by $70.28 and $69.27. The 50-day Exponential Moving Average (EMA) lies at $72.39, suggesting some bullish sentiment, while the 200-day EMA is at $73.43, near the pivot point, potentially capping upward movements.
Chart patterns reveal an upward trendline that has prompted a bullish response from the $71 support level. Presently, USOIL is navigating towards the $73.48 pivot point. The proximity of the 200-day EMA to this pivot point could serve as a resistance zone, possibly restraining further ascent.
The outlook for USOIL is bearish below the $73.48 threshold, suggesting that the commodity’s next move could be pivotal.
Brent Oil Price Forecast
UK Oil (UKOIL) registers a modest increase of 0.36%, trading at $78.29. The 4-hour chart reveals a pivot point at $78.70, with resistance levels at $79.36, $80.29, and $81.44, while supports are positioned at $77.30, $76.43, and $75.19.
The 50-Day and 200-Day Exponential Moving Averages (EMAs) are placed at $77.90 and $78.62, respectively, close to the pivot, indicating potential resistance that could impede upward momentum.
An upward trendline initiated a bullish response near the $76.50 level, propelling UKOIL toward the pivot of $78.70. The proximity of the 200-Day EMA to the pivot suggests it could restrain further upward progress. The current trend for UKOIL is bearish below the $78.70 mark, with the commodity’s immediate direction dependent on its ability to surpass this pivot point.
