Natural Gas and Oil Forecast: Fed Dovish Shift and China Weakness Pressure Prices

Market Overview

Oil prices retreated on Monday as renewed U.S.-China trade frictions and concerns over a looming supply glut deepened worries about slowing global energy demand. Both benchmarks ended more than 2% lower last week, their third straight weekly loss, after the International Energy Agency projected a growing supply surplus in 2026.

“Rising output from major producers and weakening economic indicators in China are amplifying downside pressure,” said Toshitaka Tazawa, analyst at Fujitomi Securities.

China’s third-quarter GDP expanded at its slowest pace in a year, driven by weak domestic demand and softer exports, highlighting the strain from ongoing trade tensions. The World Trade Organization warned last week that prolonged U.S.-China decoupling could reduce global output by as much as 7% over time.

Tensions have escalated in recent weeks, with both nations imposing new port fees on bilateral shipments, a move analysts say could disrupt freight flows and dampen trade activity between the world’s two largest energy consumers.

Geopolitical uncertainty also persists over Russian oil flows. President Donald Trump reiterated Sunday that Washington would maintain tariffs on India unless it halts Russian imports. Meanwhile, U.S. and European officials are pressing Asian buyers to scale back purchases from Moscow, a move that could redirect cheaper barrels toward China.

On the supply front, U.S. drillers added oil and gas rigs last week for the first time in three weeks, according to Baker Hughes, hinting at a potential rebound in American output as global demand weakens.

Natural Gas Price Forecast

Natural Gas futures rebounded sharply from the $2.93 Fibonacci support, climbing back above the $3.10 level. The price now faces resistance near $3.17, aligned with the 50-day EMA. A decisive break above this zone could drive a retest of $3.25, where the 200-day EMA caps further gains.

The RSI recovered to 64, signaling improving bullish momentum after an oversold phase. However, if prices fail to sustain above $3.10, a pullback toward $3.06 or $2.93 remains likely.

Overall, short-term sentiment has turned cautiously bullish, but follow-through buying is needed to confirm a reversal toward the $3.30–$3.35 range.

WTI Oil Price Forecast

WTI Crude Oil remains under pressure, trading near $56.60 after failing to hold above the $57.40 resistance zone. The 50-day EMA at $58.96 and descending trendline continue to cap upside momentum. A break below the $55.90 support could open the way toward $54.80 and $53.80.

On the upside, bulls need a close above $57.40 to challenge $59.10. The RSI at 32 shows weak momentum, suggesting sellers still dominate, though the market is near oversold territory.

Short-term sentiment stays bearish unless oil reclaims the 50-day EMA, while further declines could test the lower range around $54 if the dollar strengthens or demand concerns persist.

Brent Oil Price Forecast

Brent Crude Oil remains under selling pressure, hovering near $60.70 after repeated failures to reclaim the $61.80 resistance. The 50-day EMA at $62.78 and a descending trendline from earlier highs continue to act as strong barriers.

A sustained drop below $60.20 could open the door to $59.35 and $58.40. The RSI near 32 shows weak momentum, suggesting bears still control the market, though conditions approach oversold territory.

For buyers to regain traction, Brent must break above $61.80 to target $63.00. Until then, the broader outlook remains bearish, with risk of further downside if demand expectations continue to weaken.