Natural Gas and Oil Forecast: Geopolitical Tensions Support Prices Despite Weak Momentum

Market Overview

Energy markets kicked off the year in a feisty mood, as geopolitical tensions sent oil and natural gas prices into a spin. Brent crude hovered just shy of $60.9 a barrel, and held firm after OPEC+ agreed not to increase output, which helped to bolster prices despite all the trading choppiness the markets were seeing.

Analysts point out that supply risks and uncertainty over global politics are still holding back price falls – some are even warning of potential upside for crude. Meanwhile, natural gas traders are trying to weigh up supply expectations against all the macro uncertainty out there. As it is, global equities are holding up pretty well & haven demand is still a thing, so energy prices seem supported even though volatility remains high.

Natural Gas Price Forecast

Natural gas is currently around $3.47 a unit on the 4H chart, having taken a bit of a tumble after failing to break through the key resistance level at $4.00. Since then, it’s slipped below the short-term trendline & is now testing the $3.45-$3.50 support zone, which was where it was consolidating previously.

The 200-EMA is still around $3.90, capping any potential upside, while the Fibonacci retracement of the last rally shows price slipping below the 61.8% level.

At the same time, the RSI is drifting down towards 38, which means momentum is weak right now, but not yet to the point where it’s overdone. The trade idea is to sell if and when the price falls below $3.45, with a target of $3.10 and a stop-loss above $3.75 if you want to cut your losses.

WTI Oil Price Forecast

WTI crude oil is currently around $56.97 on the 4H chart and is clinging to the $56.55 support level by its fingernails after a sharp rejection of the descending trendline at $58.70. Price is still being held back by the falling channel & the 200-EMA around $59.60, so the overall bias is still pointing lower.

The green demand zone is holding back the price action at $57.40, where it had been consolidating for a while, and which also coincides with the 38.2% Fibonacci retracement of the latest upswing.

The RSI is hovering near 45, which is pretty weak – but we’re not seeing any signs of overselling yet. The trade idea is to sell rallies towards $58.50, with a target of $55.80 and a stop loss above $59.70 to limit your losses.

Brent Oil Price Forecast

Brent crude oil is currently around $60.39 on the 4H chart and is slowly drifting lower after failing to break through the descending trendline. The 200-EMA is staying at $62.20. Price is currently being squeezed inside a short-term triangle, with lower highs capped at $61.80 and a rising support level at $60.00.

The $61.06 level looks like a near-term resistance level, while the $59.38-$60.01 zone is the key support area. The RSI is sitting near 42, which is pretty weak – but it’s not exhibiting any signs of overselling just yet.

The Fibonacci retracement of the last rebound shows price being rejected at the 50% level. The trade idea is to sell if and when price goes below $60.00, with a target of $58.70, and a stop loss above $61.20 if you want to limit your losses.