Natural Gas and Oil Forecast: Hormuz Risk Fears – Is WTI Ready to Moon?

Oil and Natural Gas Outlook: Hormuz Disruption Drives Energy Risk Premium

WTI crude is still hovering between $99 and $101 a barrel, despite having touched $101.50 earlier in the day. This move just keeps picking up steam, extending a rally of around 50% from where things were in late February, when prices first dipped below $70. Meanwhile Brent is holding steady at above $112.

The price surge can largely be attributed to all the alarm bells that are ringing about supply disruptions in the Strait of Hormuz – the critical shipping lane that handles nearly a fifth of the world’s oil and gas. And to be fair, the International Energy Agency is warning that up to 11 million barrels per day of supply could be caught up in this mess.

This has pretty much blown past earlier projections of a surplus of 2 to 3 million barrels per day. And to add to the chaos, natural gas markets are looking at price rises in step with crude, with fears that export bottlenecks and renewed inflation worries are about to get a whole lot worse.

Natural Gas Price Forecast: Symmetrical Squeeze Near $3.13 Signals Breakout Risk

Natural Gas futures on the 4 hour chart are stuck in limbo around $3.126, caught between the weight of a downtrend line that comes down from the $3.48 peak and a gentle support line that starts at the $2.81 base. As we get closer, it looks like a big burst of volatility is on its way.

Right now, price is sort of hovering around its 50 period moving average, at $3.108 – that’s the level that suggests things are pretty much balanced in the short term. Meanwhile the RSI (relative strength index) is getting comfy around 50 – that’s neutral, so you can’t really tell if the price is going to shoot up or crash down.

If natural gas can break past $3.26, that’s going to be a big deal – it would basically say the downtrend line is no longer relevant, and we could see some real gains to $3.37 or even $3.48.

On the flip side, if things start dropping below $3.01, it’s not hard to imagine prices plummeting all the way to $2.92. For now, the technicals seem to be saying “wait-and-see” – it’s time to be patient as natural gas gets ready to break out of this squeeze phase.

WTI Crude Oil Price Forecast: Break Above $100 Signals Trend Continuation

WTI Crude is hovering around $101.41 on the 4 hour chart, after making a decisive move to reclaim the all-important $100 level and blast through the recent resistance that had been holding it back. Price is still playing nice with a rising trendline from the $81.53 floor, and that’s all well and good considering the higher lows and solid bullish sentiment that’s building up.

You can bet your house the 50-period moving average at $92.94 is acting as a bit of a safety net right about now, and the fact that the RSI has finally started to show some real momentum , pushing above 60, has got to count for something.

Next up, we have $102.98 as the immediate target for resistance, followed by a couple of other major hurdles at $110.25 and $116.86. If this trend keeps on going, you can’t rule out a visit to those numbers.

On the flip side though, if WTI Crude starts to falter and dips below $98, that could be a bit of a warning sign for the shorter term momentum and might even expose $92.94. But as long as it holds above that ascending trendline, then the odds still favour a bit of an expansion up towards $105-$110 in the coming days.

Brent Crude Oil Price Forecast: Bullish Structure Targets $119 After $114 Break

Brent crude on the 4 hour chart is currently trading around $113.89 – having bounced back up from $110 and now pressing hard against that $114.47 resistance level. Despite this the price is still managing to respect a rising trend line from down at the $87.10 low, and a strong sequence of higher highs and lower lows is unfolding

The 50 period moving average is just sitting at around $106.55 and that’s helping to keep things nice and stable – which is pretty much reinforcing the bullish pattern that’s been developing. The momentum still looks pretty good, with the RSI still well above 60, which suggests that the buying interest is coming from a sustained source rather than just being a flash in the pan.

If crude can finally break above $114.47 then it will be a pretty big deal and opens the doors to possible $119.44 and even $125.54, but if it was to fall below $110 then that would be a pretty clear sign of weakness and would put the $106.55 support to the test, and unless the trend line support holds then the bulls will be giving up control.