Key Insights
- Yemen strikes, Suez Canal disruptions heighten oil market volatility; Natural Gas, WTI, Brent affected.
- USOIL, UKOIL prices drop amid Middle East tensions; potential global trade impact looms.
- Geopolitical unrest rattles energy markets; Natural Gas and Oil prices show bearish trends.
Quick Fundamental Outlook
Recent U.S. military strikes in Yemen against Houthi-controlled areas and a missile attack on a Greek-owned vessel in the Red Sea have escalated regional tensions. This escalation, alongside the U.S. plan to re-list the Houthi rebels as terrorists, has heightened concerns about stability in the region.
The situation has impacted global shipping routes, with increased war risk insurance premiums and diversions affecting the Suez Canal, a critical trade passage. These developments have potential economic implications, with fears of inflationary pressures and disruptions in raw material deliveries.
Major oil companies like Shell and Chevron are adjusting their strategies in response, with Shell suspending Red Sea shipments. The crisis could influence oil prices and trading patterns for commodities like USOIL, UKOIL, and Natural Gas.
Natural Gas Price Forecast
Natural Gas (NG) on January 17 is trading lower at $2.53, a decrease of 1.13%. The 4-hour chart indicates a pivot point at $2.6681. Resistance levels are at $2.8113, $2.9777, and $3.1195, while support is found at $2.4769, followed by $2.3538 and $2.2092.
The 50-Day Exponential Moving Average (EMA) is at $2.7140 and the 200-Day EMA at $2.6987, both above the current price, suggesting resistance. Earlier this week, NG broke below an upward trendline around 2.7200, and recent bearish candlestick patterns under both the 50 and 200 EMA indicate a sell signal.
The overall trend for Natural Gas is bearish below $2.6681. In the short term, if NG fails to move above this level, it may continue to face downward pressure.
WTI Oil Price Forecast
US Oil on January 17 is witnessing a decline, currently priced at $71.04, marking a 1.06% drop. The 4-hour chart shows a pivot point at $71.58. Resistance levels are identified at $72.91, $74.21, and $75.15, while support can be found at $70.28, followed by $69.27 and $68.08.
The 50-Day Exponential Moving Average (EMA) stands at $72.31 and the 200-Day EMA at $73.48, indicating potential resistance above the current price.
A notable bearish engulfing candle pattern on the 4-hour timeframe suggests a strong bearish bias. The trend for US Oil remains bearish below the pivot point of $71.58.
Brent Oil Price Forecast
On January 17, UK Oil (UKOIL) is trading lower at $76.88, a decrease of 1.22%. The 4-hour chart indicates a pivot point at $77.90. Resistance levels are set at $78.88, $80.19, and $81.44, while immediate support is found at $76.43, followed by $75.19 and $73.83.
The 50-Day Exponential Moving Average (EMA) is at $77.88 and the 200-Day EMA at $78.66, both slightly above the current price, suggesting resistance points. UKOIL’s chart shows a symmetrical triangle pattern, which might provide support around the $76.43 level. A break below this triangle could lead to further declines.
However, traders might consider waiting for a potential bounce to the $77.90 level before initiating sell positions.