Natural Gas and Oil Forecast: Can WTI Break $84.75 as Brent Recovery Builds?

Energy Markets Navigate Persistent Supply Disruptions and Shifting Demand

Global oil supply is still recovering after months of fighting between the US and Iran reduced flows through the Strait of Hormuz, the world’s main shipping chokepoint for crude. Although exports from the strait increased somewhat after interim agreements, the International Energy Agency says they are still well below pre-conflict volumes, and output remains curtailed in many major producers despite a reduction in shut-ins from earlier peaks. While strategic stocks have been drawn down heavily and commercial stocks in some countries are lower than normal, increased non-OPEC output from the Americas has helped offset the shortfall.

Oil demand has softened, although higher prices spurred some fuel switching and a sluggish industrial sector weighed on product consumption; however, seasonal demand is picking up in the Northern Hemisphere and pent-up activity should begin to flow.

Natural gas demand fell sharply in H1 due to a combination of conservation efforts and switching to coal in Asia, where imports were constrained by reduced flows from Qatar and the UAE. Gas consumption in Europe was also low due to a rise in renewables and higher prices. The US, however, saw its gas market shielded by high production and comfortable storage levels, with ample inventories and rising output limiting upward pressure. Despite a rise in power generation use, US gas demand is forecast to fall slightly overall in 2024, and the global outlook also sees demand falling marginally.

Natural Gas Technical Analysis: Recovery Faces Strong Fibonacci Resistance

Natural gas has bounced off the $2.648-$2.693 support area after falling into oversold territory, though the longer-term trend remains negative as price is still below both the 50-EMA ($2.843) and 100-EMA ($2.930). The current rally is being tested at the 2.0 Fibonacci level at $2.693.

The RSI has recovered to around 40, suggesting that the sell-off is losing steam, but it remains bearish. Resistance is positioned at $2.756, followed by $2.816 and $2.897. The next level of support is at $2.693, with $2.648 and $2.590 as further downside levels.

The overall sentiment remains negative as long as price is below $2.756. A break above this level would pave the way for a rally towards $2.816, while a break below $85.68 or $2.693 could lead to a test of $2.648 and possibly $2.590.

WTI Crude Oil Technical Analysis: Bulls Reclaim EMAs but $84.75 Remains the Breakout Barrier

WTI crude oil has recovered strongly following its rebound from the $79.00 area, with price now positioned above the 50-EMA ($83.57) and 100-EMA ($81.61), along with the pivot level near $83.30. The RSI has moved back up to approximately 52, indicating positive momentum that still has room to run. Key resistance sits at $84.75, followed by $87.66 and $90.60.

On the other side, $83.30 represents initial support, while $81.61 and $78.27 mark stronger support zones. The overall sentiment remains cautiously bullish as long as price remains above $83.30. A break above $84.75 would indicate a strengthening recovery towards $87.66, while a break below $83.30 could signal a return towards $81.61.

Brent Crude Oil Technical Analysis: Fibonacci Support Keeps Recovery Intact

Brent crude oil is recovering after buyers stepped in around the $80.63 Fibonacci base. Price has since moved back above the 23.6% Fibonacci level at $85.68, where it is currently holding while maintaining a position above the 100-EMA ($86.49), but below the 50-EMA ($88.25). The RSI has climbed to around 50, signaling a balanced market as buyers look to regain control.

Resistance levels are positioned at $88.81, followed by $91.33 and $93.91. Key support levels are at $85.68, followed by $80.63. The short-term outlook remains positive as long as price stays above $85.68. A move above $88.81 would signal a strengthening rally towards $91.33, while a break below $85.68 would point towards $80.63.