Natural Gas and Oil Forecast: Hawkish Fed May Pressure Prices Amid 4% Gain

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Updated: Mar 15, 2024, 11:03 UTC

Key Points:

High U.S. inflation data prompts a slight retreat in oil prices, yet a weekly gain over 4% is anticipated.
Strengthened dollar and Fed's expected hawkish stance may increase pressure on natural gas and oil prices.
Geopolitical tensions and supply disruptions, alongside strong OPEC and IEA demand forecasts, hint at a tight oil market outlook.

Market Overview

In the wake of unexpectedly high U.S. inflation data, oil prices experienced a minor retreat from their four-month highs, influenced by profit-taking and a strengthened dollar. Despite this, crude oil, including Brent and WTI contracts, is on track for a weekly gain of over 4%, buoyed by signals of increased U.S. demand and tightening fuel markets.

The heightened dollar and anticipation of the Federal Reserve’s hawkish stance may pressurize natural gas and oil prices by making them more expensive for holders of other currencies and by affecting investor sentiment regarding energy commodities.

Additionally, geopolitical tensions and supply disruptions, alongside robust demand forecasts from OPEC and the IEA, suggest a tight supply and strong demand outlook for oil markets, potentially impacting future price trajectories for both natural gas and oil.

Natural Gas Price Forecast

NG Price Chart

On March 15, Natural Gas (NG) experienced a modest decline, dropping by 0.44% to close at $1.825. Positioned slightly below its pivot point of $1.84, the commodity faces a potential trend shift. Resistance levels are set at $1.88, $1.93, and $1.99, challenging any attempts at upward movement.

Conversely, support is found at $1.78, with subsequent levels at $1.73 and $1.68, providing key fallback positions in case of further declines. The 50-day and 200-day Exponential Moving Averages (EMAs) at $1.83 and $1.94, respectively, indicate a mixed outlook.

The technical stance suggests bearishness below $1.84, with the possibility of shifting to a bullish bias if it surpasses this critical level.

WTI Oil Price Forecast

WTI Price Chart

On March 15, USOIL slightly increased by 0.06%, trading at $81.04. The commodity is currently trading below its pivot point of $81.60, a critical juncture that may determine its short-term direction. Resistance levels are staged at $82.22, $82.84, and $83.44, which could impede upward momentum.

Conversely, support is established at $80.63, with further safety nets at $80.04 and $79.57, crucial for buffering any declines. The Relative Strength Index (RSI) details are not provided, but the 50-day and 200-day Exponential Moving Averages (EMAs) at $79.07 and $77.51, respectively, suggest underlying support for the price.

The technical outlook for USOIL is cautiously bearish below the $81.60 pivot, with potential for bullish reversal upon breaching this level.

Brent Oil Price Forecast

UKOIL Price Chart

UKOIL edged up by 0.14%, trading at $85.18. Trading just below its pivot point of $85.67, UKOIL’s next moves could be pivotal. Resistance levels are outlined at $86.43, $87.13, and $87.75, posing potential hurdles for upward momentum.

Conversely, support is found at $84.74, with further levels at $84.15 and $83.70, providing critical junctures to counteract downward trends. The 50-day and 200-day Exponential Moving Averages (EMAs), at $83.23 and $82.03 respectively, underline a supportive base for the price.

The current analysis suggests a bearish trend below $85.67, with opportunities for a bullish shift upon surpassing this marker.

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About the Author

Arslan Aliauthor

Arslan, a webinar speaker and derivatives analyst, has an MBA in Finance and MPhil in Behavioral Finance. He guides financial analysis, trading, and cryptocurrency forecasting. Expert in trading psychology and sentiment.