Natural Gas and Oil Forecast: Hormuz Standstill – Can Brent Bulls Hit $89.57 Next?

Market Overview

WTI Crude oil futures cut back their earlier losses to around $80 per barrel by Friday, still on track to be the biggest weekly jump in over two years.

The earlier plunge – which at one point hit as much as 3% – followed hints from the US that they’d be bringing in some measures to tone down surging energy prices. These could include tapping into their strategic crude reserves, allowing for a bit more slack on fuel blending rules, and even letting the Treasury get involved with trading oil futures.

Still, by the end of the week crude had managed a 20% gain, with the Middle East conflict bringing energy markets to a standstill – shipping through the Strait of Hormuz had come to a near-halt.

The fighting showed no signs of letting up, with Iran in denial about claims they’d asked for a ceasefire and no interest in talking either way.

Iran had also just launched a bunch of missiles and drones across the Gulf, hitting an oil refinery in Bahrain along the way, while Israel continued to fly airstrikes into Tehran and the US had essentially put its embassy in Kuwait on hold.

Natural Gas Analysis: $2.91 Support At A Breaking Point As Momentum Begins to Wane

Natural Gas futures are hanging precariously at $2.97, just a hair above that all important $2.91 support level which just so happens to also have 200-ema and a trendline on the 2-hour chart all meeting up at the same spot.

The 50-ema is basically flatlining at $2.99 at the moment, meanwhile the 200-ema around $2.91 is just sitting there doing its job as a solid support level. But if price does manage to break below $2.91, you’ve got $2.84 and $2.77 where the previous swing lows were, and those are definitely worth keeping an eye on.

RSI is sort of stuck at 50, which is basically telling us that the momentum has simply evaporated – and it’s been having a hard time getting back up above 60. As long as we can manage to keep our heads above that trendline, though, then a recovery back up to $3.03 and $3.10 is still very much on the table.

WTI Crude Oil Analysis: Break Above $78.19 Opens Path to $82.23

WTI is trading around $81.35 and still going strong after breaking above that $78.19 resistance level. It’s still got the rising trend structure intact, and the ascending trendline and higher highs and higher lows are all good signs for the bulls. The 50-day EMA is sloping up at $75.16, while the 200-day EMA at $69.16 is telling me the same thing – we’re heading higher here.

The first level of support is at $78.19, and then $75.16. If WTI can push on past $82.23 I reckon it could aim for $84.91 but if it breaks below $78.19 then it’s back to the drawing board – consolidation time again.

Brent Crude Oil Analysis: Rising Trendline Supports Push Toward $87.42

Brent is hovering around $85.79, and so far, it’s managed to stay above the upward trendline on the 2 hour chart. The price cleared that pesky $84.49 resistance and is making higher lows, which is all good news for the short term bulls. The 50-day EMA at $82.00 is trending upwards, and the 200-day EMA near $74.00 is saying the same thing – we’ve got a strong upside bias on our hands.

The support levels are at $84.49 and then $82.00. If Brent can get above $87.42 for any length of time I reckon it could aim for $89.57, but if it breaks below the trendline then we’ll be looking at a whole lot of consolidation around $82.00.