Natural Gas and Oil Forecast: China’s Trade Surplus, Will USOIL Swing Bullish?

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Updated: Mar 7, 2024, 13:00 GMT+00:00

Key Points:

Minor retreat in oil prices amid anticipation for China's demand data and mixed U.S. monetary policy signals.
China's trade surplus exceeds expectations, indicating robust trade activity and potential for increased oil demand.
US and Brent oil show slight fluctuations, with technical indicators suggesting a bullish trend if pivot points are sustained.

Natural Gas and Oil Forecast: China’s Trade Surplus, Will USOIL Swing Bullish?

China’s Trade Surplus Fuels Demand

Oil prices saw a minor retreat in Asian trading, interrupting the recent surge as the market eyes crucial demand signals from China and navigates through nuanced cues from U.S. monetary policy. The initial surge, sparked by Federal Reserve Chair Jerome Powell’s suggestion of potential interest rate reductions, was tempered by comments from Minneapolis Fed Chief Neel Kashkari, who expressed a cautious stance on inflation and the prospect of minimal rate cuts in 2024.

The focal point shifts towards China’s newly released trade data, revealing a substantial trade surplus of 891B Yuan, surpassing expectations and previous figures significantly. In USD terms, the trade balance soared to 125.2B, indicating robust trade activity and potentially higher oil demand than anticipated. This data emerges against the backdrop of China’s modest GDP growth target for 2024 and limited details on stimulus measures, stirring mixed sentiment in the markets.

Natural Gas Price Forecast

NG Price Chart

Natural Gas (NG) sees a modest uptick to $1.9830, marking a 0.20% rise amidst a cautiously optimistic market. Technical analysis reveals a supportive upward channel, with the pivotal $1.9506 acting as a foundational baseline for bullish sentiment.

Resistance levels are charted progressively higher at $2.0287, $2.0841, and $2.1346, challenging any upward movement. On the downside, supports at $1.8604, $1.8016, and $1.7257 offer a safety net against potential pullbacks.

The 50-Day and 200-Day Exponential Moving Averages at $1.9079 and $1.9901, respectively, underscore the current bullish bias. Should Natural Gas dip below its pivot, it could trigger a bearish shift.

WTI Oil Price Forecast

WTI Price Chart

In today’s commodity market, US Oil (USOIL) marginally dipped by 0.02%, setting the price at $79.03. The four-hour chart delineates a pivotal stance at $78.38, dictating the immediate market direction. Overhead, resistances are positioned at $79.43, $80.20, and $81.06, challenging bullish advancements. Conversely, supports lie at $77.61, $76.81, and $75.82, safeguarding against further declines.

Technical indicators, including the 50-day and 200-day Exponential Moving Averages (EMAs) at $78.55 and $76.88 respectively, hint at underlying bullish sentiment. The current market configuration, hovering above the pivot, underscores a potential for upward movement, yet a descent below $78.38 could pivot the trend towards bearish territory.

Brent Oil Price Forecast

UKOIL Price Chart

UKOIL (Brent Crude) exhibited minimal movement, edging down by a mere 0.01% to position itself at $82.85. Within the confines of a four-hour chart, the action revolves around a pivot point established at $82.76, delineating the battleground for forthcoming price dynamics.

On the ascent, Brent faces resistance at $83.45, extending to $84.06 and peaking at $84.86, which could cap further rallies. Downward, the first line of defense is seen at $81.82, with subsequent supports at $80.97 and $80.32, ready to arrest any pullback.

The 50 and 200-day Exponential Moving Averages, at $82.59 and $81.53 respectively, underscore a bullish undercurrent, suggesting resilience in the current pricing structure. Should UKOIL sustain above $82.76, the bullish narrative persists, yet slipping below could prompt a reconsideration towards bearish territories.

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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.