Natural Gas and Oil Forecast: Descending Channels Signal Weak Momentum

Market Overview

Oil prices slipped again on Friday, setting up a second consecutive weekly decline as easing geopolitical risk tempered supply concerns. Brent crude fell 2.3% on the week, while WTI dropped 2.5%, as markets priced in improving prospects for a resolution to major global conflicts.

That optimism offset fears around potential supply disruptions tied to sanctions enforcement and shipping restrictions affecting smaller producers, which account for roughly 1% of global output.

Analysts noted that uncertainty over enforcement, combined with softer demand expectations, has reduced the geopolitical risk premium embedded in prices. Bank of America said lower prices may curb supply growth, helping stabilize the market rather than trigger a sharp selloff.

Natural Gas Price Forecast

Natural gas futures are trading near $3.88 on the 4H chart after a sharp selloff from the $5.10 peak earlier this month. Price remains below both the 50-EMA around $4.20 and the 100-EMA near $4.39, keeping the broader structure bearish. Recent candles show long lower wicks near $3.85, suggesting short-term demand, but the rebound has been corrective rather than impulsive.

Structurally, price is trying to base above $3.84, a key horizontal support aligned with a prior Fibonacci retracement. A break below this level would expose $3.68 and $3.54. On the upside, $4.20 is the first resistance that must flip to support to shift momentum. RSI has recovered toward 45, easing oversold conditions but not signaling a trend reversal.

Trade idea is to buy only on a confirmed break above $4.20, targeting $4.60, with a stop below $3.84.

WTI Oil Price Forecast

WTI crude oil (USOIL) is trading near $55.85 on the 4H chart, holding inside a descending channel that has guided price lower since early December. Recent candles show small-bodied sessions with long wicks, signaling hesitation rather than aggressive buying. Price remains capped below the 50-EMA near $57.30, while the upper channel trendline continues to act as dynamic resistance.

The latest bounce stalled around $56.95, a prior breakdown level that now acts as resistance. On the downside, $55.15 is key short-term support, followed by $54.40, aligning with the lower channel boundary and a Fibonacci extension of the recent leg lower. RSI is recovering toward 40, suggesting fading downside momentum but no clear reversal signal.

Trade idea is to sell rallies below $57.00, targeting $54.40, stop above $58.20.

Brent Oil Price Forecast

Brent crude (UKOIL) is trading near $59.70 on the 4H chart, still moving within a descending channel that has controlled price action since early December. Recent candles show long lower wicks near $58.70, hinting at dip-buying interest, but follow-through remains limited. Price is struggling to regain ground below the 50-EMA around $61.00, keeping the broader bias tilted lower.

The bounce attempt stalled near $60.70, a former support now acting as resistance. A break above this level would challenge the channel midline and open room toward $62.60, aligning with prior structure and Fibonacci retracement levels. On the downside, $58.70 remains key support, followed by $57.90, near the lower channel boundary. RSI is rising toward 45, suggesting easing downside pressure but no confirmed trend shift.

Trade idea is to buy only on a confirmed break above $60.70, targeting $62.60, stop below $58.70.