Natural Gas and Oil Forecast: Hormuz Risk Looms as Oil Seesaw Continues; Can Bulls Hold the Line $90?

Energy Markets Wrestle With Geopolitical Whiplash as Oil Hovers Near $92

WTI crude hit a range of $91 to $92.50 on March 26, making back about 2% of its losses after falling by almost 5% the day before. The whole month has been one wild ride: WTI had hit $119 at the start of March only to plummet down to $86.72 as soon as people thought a ceasefire was a done deal – that’s a whiplash-inducing swing of more than $32 in a ridiculously short period of time. Brent took a similar nosedive, slipping under $100 but then bouncing back up to $99.

But then last week’s EIA figures threw a wrench in things. The US crude stockpiles just skyrocketed by 6.9 million barrels to a whopping 456.2 million barrels – that’s the largest weekly increase in ages, and it’s a clear sign that people are not as eager to buy up oil when prices are this high.

Now, it’s worth noting that the EIA did report a bunch of gasoline was being pulled out of storage, so that’s some good news – but with gas prices now up to around $3.98 a gallon, a 34% hike since all this started, people are really feeling the pinch right now.

The Strait of Hormuz remains to this day the biggest potential nightmare for the global oil supply. This is because it handles something like 20% of the world’s oil shipments, so if anything goes wrong there, it’s going to send shockwaves through oil tanker prices, insurance premiums and refinery profits all over the world. The potential losses are already starting to add up: we’re talking about roughly 500 million barrels of oil equivalent lost in the long run.

Natural Gas Fibonacci Retracement in Play – Can Bulls Reclaim $3.00?

Natural Gas futures (NGJ2026) are stuck at $2.956 on the 2 hour chart, seemingly caught between the 0.236 Fib level at $2.932 and the 0.382 at $2.974. We’re looking at a Fibonacci retracement drawn from the swing low of $2.863 up to the high at $3.153, and – so far – price has been respecting those levels pretty well.

The 200-period moving average , which is hovering around $3.04, has lined up nicely with the 0.618 Fib at $3.042. We’ve got a real confluence of resistance forming in that zone above. Meanwhile, the shorter moving average is starting to curl flat near $2.93, and is now actually acting as a bit of a floor for price lately.

Trade idea: Looking to go long if we can get above $2.975 and then targeting that $3.04 – $3.09 confluence zone above. Good stop level below $2.92.

WTI Crude Oil Trapped in a Descending Channel – Is $97 the Next Target?

WTI crude (USOIL) is currently trading at around $92.42 on a 2-hour chart, and for now it’s stuck at the lower end of a descending channel which has been in play since that big jump up to $107. The price got knocked back down hard from that high and we saw a big long upper wick on the candle – a classic sign of exhaustion. Since then, we’ve seen the top of this channel marking new highs while that $92-$93 area has really held the line for us, being tested a few times now.

On the price chart the 200-period moving average – that blue line around $88-$89 – provided a solid bounce for us last week and that tells us buyers are still kicking around at the lower end of things.

Just above the $92-$93 mark sits the red moving average, acting as the immediate ceiling that the bulls are trying to breach. If we can get past that upper channel trendline and get back up to $96-$97 then the door is wide open for the next target $100+

Trade idea : Buy above $93.50 with a target in the $97.30 area and stop below $91.

Brent Crude Hugging the $100 Psychological Level – Ascending Trendline Holds the Key

Brent crude, which is represented by the symbol UKOIL, is trading at $99.22 on the 2-hour chart and is just about to hit the very important psychological resistance zone of $100. A trendline that’s been in place since late February, when prices were hovering around $80 has still got a good hold, and last week price bounced right off it at around $93 – that’s some reassuring support.

The 200 period moving average is acting as a bit of a safety net down at $97.78 – the price has now reclaimed that area and is not about to leave it, which all points to the bulls being in charge.

If you take a look back at the chart you’ll see that there are a couple of horizontal resistance lines sitting up at $105 and $108 – both of those have been places where the sellers have come in and started to slow things down in the past. But on the downside, there are still two good demand zones to be found, one at $93.35 and another at $92.

Trade idea: Buy UKOIL if the price closes above $100 on the 2 hour chart, target a price of $105 and set your stop below $97.50.