Natural Gas and Oil Forecast: 4.2M Barrel Inventory Jump Weighs

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Updated: Mar 1, 2024, 11:29 GMT+00:00

Key Points:

Fed's decision against rate cuts and rising US crude inventories push USOIL into a slight bearish trend.
Surging crude stockpiles and low refinery utilization challenge oil markets, despite OPEC+ cuts and Middle East tensions.
High interest rates to combat inflation could suppress oil demand, signaling a cautious outlook for energy markets.

Crude Futures Dip Amid Fed’s Rate Stance and Surging U.S. Stockpiles

USOIL trades slightly bearish as the Federal Reserve decided against cutting interest rates soon, and a significant increase in US crude stockpiles exerted additional pressure.

The US Energy Information Administration reported a larger-than-expected rise in crude inventories by 4.2 million barrels last week, marking the fifth consecutive week of increases. Refinery utilization remained low, affecting fuel stock levels. Despite these challenges, potential OPEC+ output cuts and Middle East tensions provided some support.

However, the Federal Reserve’s stance on interest rates, indicating they might remain high to combat inflation, could dampen oil demand, impacting the Natural Gas and Oil Forecast by suggesting a cautious market outlook amidst economic and geopolitical factors.

Natural Gas Price Forecast

NG Price Chart

Natural Gas (NG) prices edged up by 0.27% to $1.8760 after falling sharply from $1.9375 area, indicating a slight upward momentum in the market. The commodity’s price hovers around the pivot point of $1.8740, with immediate resistance levels at $1.9378, $1.9871, and $2.0470. These figures suggest potential hurdles for further price increases.

On the downside, support is found at $1.7983, $1.7257, and $1.6773, providing a safety net against significant drops. The 50-day Exponential Moving Average (EMA) stands at $1.8130, while the 200-day EMA is at $1.9979, marking a bullish trend above the pivot point.

WTI Oil Price Forecast

WTI Price Chart

USOIL‘s recent trading session saw a price uptick of 0.27% to $78.44, after staying bearish below $80, reflecting a cautiously optimistic sentiment in the market. The commodity is currently navigating key technical thresholds, with a pivot point at $78.96.

Resistance levels loom at $79.61 and $80.36, potentially restraining further gains, while support at $77.86 and $76.91 provides a buffer against downturns.

The bullish trend is affirmed above the 50-day Exponential Moving Average (EMA) of $77.83, with the 200-day EMA at $76.29 further bolstering this outlook.

Brent Oil Price Forecast

UKOIL Price Chart

UK OIL‘s trading session reflected a subtle rise, marking a 0.27% increase to $81.16. This uptick suggests a tempered optimism among traders as UK OIL tests pivotal technical markers.

With a pivot point set at $81.46, the asset faces immediate resistance levels at $83.12, $83.92, and $84.88, hinting at potential challenges in ascending further. Conversely, support levels established at $80.10, $79.00, and $77.59 offer a cushion against declines.

The positioning of the 50-day and 200-day Exponential Moving Averages at $82.20 and $82.17, respectively, indicates a nuanced bullish stance above the pivot.

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About the Author

Arslan Aliauthor

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.