Natural Gas and Oil Forecast: Geopolitical Risks Fuel Oil Tightness, NatGas Faces Oversupply

Market Overview

The geopolitical disruptions take centre stage as US Iran talks stall and leave strait of Hormuz effectively closed for business.  As a result of stalling US Iran talks – the Strait of Hormuz finds itself shut down tighter than usual. This has led to 20% of worlds oil usage being severely restricted and in turn has brought about major shut ins in production right across the gulf.

This in turn has caused global inventories to dwindle at an alarming rate – especially during Q2 2026. In the states however , commercial crude oil stocks went up by a notable 1.9 million barrels in the week ending on 17th April reaching a total of 465.7 million barrels – just 3% higher than the five year average. Something to note however – despite being near record levels US production is forecasted to decline by about 13.5 million bpd by the end of 2026. The EIA are saying this is largely due to shale activity that is starting to slow right down.

Natural Gas Fundamentals

US balances are still looking a bit soft – especially during the shoulder season. The EIA reported a massive 103 Bcf injection in storage for the week ending on 17th April . As a result stockpiles have risen to ahe five year average. Mild weather is the culprit behind reduced de record 2,063 Bcf – that’s 142 Bcf more than this time last year and 137 Bcf above tmand while production of gas hasn’t let up yet – although some have started to apply some tactical cuts and curtailments. LNG exports on the other hand are still going strong – providing a much needed boost and helping to keep demand from getting out of control.

All in all oil is facing some very tight physical balances thanks to the risks emanating from the Middle East . Meanwhile natural gas is suffering from the opposite problem – it’s just got too much of a good thing – a very comfortable supply cushion.

Natural Gas Weakness at $2.686 – Channel Pressure Builds

Natural Gas is trading at $2.686, which is to say that it’s stuck in a bit of a rut within a descending channel. The candlesticks are showing a pretty clear pattern of lower highs and hammering in some pretty bearish closes as well – all of which confirms that yes, the pressure is indeed on. Resistance is just out of reach at $2.806, while support is sitting pretty at $2.664.

That RSI of 40 is telling us that Natural Gas has got bearish momentum going on, but it’s not yet so far gone that we’re worried about it getting into a bit of a free fall. And then there are the moving averages – which are sloping downwards, reinforcing the whole ‘weakened’ vibe. So should it break below $2.664, it might well aim for $2.568 – while a recovery above $2.806 might just calm things down a bit.

Trade Idea: Sell below $2.66, with a stop loss set at $2.81.

WTI Crude Oil Breaks $101.77 – Bulls Eye $102.07 Resistance

WTI has clawed its way up to $101.77 & is well above that trendline which has been ascending. The candlesticks are showing a clear pattern of bullish closes with higher lows to boot, which suggests those bulls are feeling pretty confident about their momentum. The next big hurdle is that resistance point at $102.07, after which comes the even steeper wall at $105.75. Bear in mind that beneath that $98.22 rock for support, with an even deeper layer of demand kicking in around $96.00.

The RSI is at a fairly healthy 62, which is telling us that the momentum is strong – but as yet hasn’t hit overbought territory. Moving averages are in the green, reinforcing the whole ‘upside bias’ vibe. Should WTI break above that $102.07 barrier, it’s likely to aim for $108.00, while failure to do so might well send it reeling all the way back to $98.22.

Trade Idea: Take a long position above $102.10, with a stop loss set at $98.20.

Brent Crude Oil at $106.08 – Testing Downtrend Breakout Zone

Brent is hanging at $106.08, with its nose pressed firmly against a trendline that’s been acting like a bit of a ceiling. The candlesticks are showing a run of bullish bodies, which is a pretty good indication that it might just break through that downtrend after all. Resistance, of course, is sitting pretty just ahead at $107.28, and then there’s the even steeper wall of $111.58 to worry about. On the flipside, you have $100.00 down there as support, with a bit of a depths charge further down at $97.78.

That RSI of 58 is telling us that Brent’s got a bit of momentum going on, but not so much that it’s getting carried away just yet. And the moving averages? They’re converging – which could signal that the trend is about to change tack rather dramatically. Should Brent manage to close above $107.28, it’ll probably aim straight for $115.44, while failing to do so might see it slide all the way back down to $100.00.

Trade Idea: Buy that breakout above $107.30, with a stop loss set at $100.00.