Natural Gas and Oil Forecast: Fibonacci Barriers Cap Rallies in Crude and Gas

Market Overview

Crude price had been sliding due to the expectation of a bit more oil coming in from Latin America, but then rebounded. We are now looking at US crude at around 56.4 per barrel and Brent is hovering around 60.4. Both of those are up by about 0.7%, thanks in part to analysts pointing out that supply is still pretty tight and trade restrictions will make it hard to get more oil on the market anytime soon.

Now the attention is turning to that US employment data that’s coming out – predictions are for fairly modest job growth and pretty steady unemployment – all of which is going to make a bit of a difference on how much demand there is and how that in turn will shape the future of oil and natural gas prices.

Natural Gas Price Forecast

Natural Gas futures are trading close to $3.60 on that 2-hour chart after bouncing back from the $3.35-$3.40 demand zone, and that’s where the market’s been looking to buy. The 50-period moving average is just starting to creep up.

Still, the 100 is sitting around $3.70, a roadblock; it’s a pretty interesting picture if you look at a Fibonacci of the last drop. The 38.2% level around $3.70 marks the significant drop.

RSI is climbing towards 55, which is a good sign that momentum is picking up, but I don’t see any overbought signals yet. The trade idea is to buy a bit near $3.45, aiming for about $3.75 with a stop loss just below $3.30.

WTI Oil Price Forecast

WTI crude oil is currently hovering around $56.20 on the 2H chart, taking a hit after failing to regain the key resistance area of $57.90-$58.50. Price is still being held back by a steadily declining trendline that’s been in place since the highs in December, while at the same time being tested by a rising support line right around the $55.70-$55.50 mark.

Looking at our support levels, we have a horizontal line at $55.50, worth keeping an eye on, followed closely by another at $54.40. Meanwhile, resistance is sitting tight at $57.20 and $58.85.

The RSI is currently bumping around the 40 level, which is telling us that this is a weak market with no real signs of overselling – yet. The trade idea is to sell WTI crude oil if and when it drops below $55.70, with a target of $54.40 and a stop-loss above $56.90.

Brent Oil Price Forecast

Brent crude is currently trading just shy of $60 on your 2-hour chart, but it’s got a steady hand on the support line at $59.80. We’ve got two levels of resistance to think about too – $61.50 and $62.30 – and a bit of a ladder of support down at $59.80 & $59.30.

The 50- and 100-day average price lines are still sitting on the price, preventing any upward move. RSI is around 45, which means the price is still weak and shows no real signs of being oversold, so we expect this consolidation to keep going a bit longer.

The idea here is to sell the price if it dips below $59.80 and then look to make $58.70 with a stop-loss above $61.00