Natural Gas and Oil Forecast: Hormuz Crisis Sparks 2% Oil Rebound – Rally or Trap?

Market Overview

WTI crude futures made a U-turn early on , swinging back up to trade more than 2% higher – at the time hovering around $86 a barrel on Wednesday – after having taken a 12% hit the day before. Traders are still keeping a watchful eye on the Iran situation, and no-one seems to know when this whole thing is going to finally wrap up. US Defence Secretary Pete Hegseth said the other day that tomorrow looks like it will be the most intense day of strikes yet.

The big oil-producing countries in the Middle East have collectively seen their output slashed by over 6 million barrels per day because the Strait of Hormuz has been pretty much shut down. When a report popped up in the Wall Street Journal saying that the IEA had proposed the biggest coordinated release of oil reserves in history, there was a bit of a mini-relief – but sadly that only lasted for a little while and prices started climbing again.

The G7 has expressed its support in principle for releasing some of those oil reserves, but as of now, nothing concrete has been put into motion. Later on today, OPEC is due to come out with its assessment of the current state of global crude supplies.

Natural Gas Futures Hold $3.02 Trendline Support – $3.20 Next?

Natural Gas futures are currently trading around $3.07 on the 2 hour chart – and as long as they stay above that key support level at $3.02 its looking alright. The 50 Day Moving Average around $3.10 is acting as near term resistance, and we’ve also got some horizontal resistance levels at $3.166 and $3.265 that price needs to clear. The recent candles have been smaller in size after that sharp rejection from $3.36 – which suggests that momentum is starting to cool off.

The RSI is also hovering around 45–50 – which signifies a pretty neutral bias again after it came out of overbought territory above 70 earlier this month. A break above $3.166 has got $3.265 in its sights – while a close below $3.02 exposes $2.889.

Trade Idea: If you plan to buy then a break above $3.17 aiming for $3.26 with a stop loss below $3.00 could be a good start.

WTI Crude Oil Outlook: $82.66 Support in Focus as $88 Caps Upside

WTI is currently trading around $85.22 on the 2 hour chart – and its holding its nerve above that key support level of $82.66 after a pretty steep rejection at $101.82. The downward move produced some pretty bearish looking candles below $96.47 – which is a clear sign of a shift in short term momentum.

Prices are currently stuck in a range between $82.66 and $88.00 with the Fifty Day Moving Average sitting right on top of it as near term resistance. But if we look a bit deeper, the 200 MA and that rising trend line around $78–$80 are providing much deeper support. Momentum on the RSI is hovering around 45 – which suggests a neutral bias after it came back down from some seriously overbought levels.

A break through the $88 level has got $91.01 in its sights – while a drop below $82.66 opens up $78.41 to the downside.

Trade Idea: If you find yourself looking to sell then a break below $82.60 aiming for $78.40 with a stop loss above $88.20 could be a good start.

Brent Crude Oil Outlook: $90 Barrier in Focus as $81 Support Holds

Brent crude is currently trading around $89.24 on the 2 hour chart – just chomping at the bit to break through that resistance level at $90.34 after that pretty sharp pullback from the $111.06 spike high. The move down has also produced some pretty bearish looking candles through $105.51 and $99.40 – which is clear evidence of a shift in short term momentum.

Price is now stuck in a range between $90 resistance and $81.36 with the Fifty Day Moving Average sitting right at the $90 level – which is acting as a bit of a magnet for prices. But if we look a bit deeper, the Two Hundred Day Moving Average and that rising trend line around $76–$80 are providing much deeper support. Momentum on the RSI is also around 45 which suggests a neutral bias again after it came back down from some seriously overbought levels.

A break through the $90.34 level opens up $95 – while a drop below $81.36 exposes $76.16 to the downside.

Trade Idea: If you find yourself looking to sell then a break below $81.30 aiming for $76.20 with a stop loss above $90.50 could be a good trade idea.