Natural Gas and Oil Forecast: Can $55 WTI and $3.35 Gas Hold Critical Support?

Market Overview

Oil and natural gas prices took a hit amid global tensions and the threat of oversupply. Crude prices slipped by over a dollar a barrel, amid expectations that 30 to 50 million barrels of sanctioned oil could find its way into the global market. The fact that Venezuelan heavy crude is currently trading at a whopping $22 discount to Brent is a clear sign of weak physical demand.

Analysts are starting to get a little worried that all this newly available oil could tip the scales in the wrong direction and make the current balance even more fragile – and some major banks are even projecting a 3 million barrels a day surplus by the early part of next year.

And yet, even though US crude inventories fell by 2.77 million barrels, we’re still seeing a buildup in fuel stocks, and prices are coming down in the Middle East, which is keeping the energy outlook a bit cautious and on the downside.

Natural Gas Price Forecast

Natural Gas futures are currently trading around $3.48 on the 2-hour chart but are showing signs of stabilizing above a clear support zone that’s been holding firm at $3.35-$3.38 recently. NG’s immediate level to watch is $3.70, which is a level of resistance, followed by $3.88.

If we were to break below $3.35, we’d expect a retest of $3.18. And as always, the momentum metric remains neutral, suggesting a modest rebound. The trade idea is to buy near $3.40, with a target of $3.75 and a stop loss below $3.30.

WTI Oil Price Forecast

Crude oil is currently trading at $56.38 on the 2-hour chart, having tumbled sharply away from the strong resistance at $58.65. Those little white sellers are finally starting to get some competition from the buyers, as recent candles have shown pretty robust bearish bodies, with tiny lower wicks poking out near $55.76.

That’s a good sign – the selling pressure is starting to ease off, and buyers are starting to take a look. Looking at the key levels, USOIL is gaining support at $55.76-$55.50, and resistance at $57.38 and $58.65.

The RSI is neutral at the moment, which leaves the door wide open for a nice little bounce. And that’s the trade idea – buy crude oil near $55.80, and target $57.40, with a stop just below $55.2

Brent Oil Price Forecast

Brent crude oil is trading just shy of $60.13 on the 2-hour chart, after pulling back towards the rising trend line that’s been acting as support. The last few candles have shown really long lower wicks around $60, suggesting that demand is emerging after repeated attempts to break below the descending trendline in the $62.20-$62.30 range.

The key level to watch is around $59.38, where it acts as support; another important level is $58.72. Resistance, as usual, is capping the move at $61.06 and $62.26.

At the moment, the momentum metric remains neutral, suggesting we’re in a consolidation phase rather than a breakdown. The potential trade idea is to buy near $59.8, with a target of $61.80 and a stop loss below $58.90.