Natural Gas and Oil Forecast: Inventory Build vs. OPEC – Who Wins the Oil War?

Energy Markets Whipsaw as Hormuz Disruptions Reprice Risk

Crude oil is being all over the shop, jumping up to $102 a barrel then dropping back down to $96, after a wild 36% spike in March. The price swings are because of the ongoing disruptions around the Strait of Hormuz, where a big chunk of the world’s oil supply – roughly 20% – sails through.

A recent 10.3 million barrel build-up in US crude oil reserves and some emergency oil releases to calm things down have taken some of the wind out of the oil price’s sails – but the Opec cartel is holding back on oil production, which is keeping a bit of a ‘geopolitical premium’ on the price. If this situation gets even worse, some analysts think we could see oil prices jump up to $110, but if the tensions ease back then prices should ease down to the low $90s.

Natural gas is trading around $2.87 per million Btu , and that’s because the demand for it is pretty low at the moment, even in the shoulder season. Although we are still exporting a reasonable chunk of our natural gas as LNG, around 15-18 Bcf a day, that’s only doing just enough to keep things steady.

The fact that US natural gas production is still chugging along at around 118 Bcf a day, means that prices are unlikely to rise much, unless the Hormuz disruption gets even worse.

Natural Gas Technical Outlook : NGK2026 Tries To Hold Its Own At $2.79

Natural Gas (NGK2026) is trading at $2.88 on the 2 hour chart, stabilizing above the $2.79 level with a bit more room to breathe after that big pullback from the $3.15-$3.25 resistance zone, where price has been stuck for some time now. And yes the price is still below that descending trendline drawn from recent highs which keeps the short term pressure on.

The 200ma at $2.95 and the $2.97 resistance level have a grip on the upside attempts. A sustained break above $2.97 and it should open the door to $3.07 and potentially $3.15.

Below $2.79 is a critical level . If the price breaks decisively below it, then $2.71 is a likely candidate to get hit.

The RSI is hovering around 45 which is a reflection of a market that’s just in neutral right now, consolidating within a bit of a narrowing range.

WTI Crude Oil Technical Outlook : USOIL Tries To Push Past $101.50

WTI crude (USOIL) is trading at $98.59 on the 2 hour chart, taking a pause after getting smart with the $106.76 area and pulling back to some mid-range support levels. The price is still above that rising trendline from the March lows and the 200ma at $92.11. And that’s still a pretty bullish picture overall.

The first bit of resistance we’re seeing comes in at $101.50 then $106.76 and $111.44 near that descending trendline resistance that’s been a thorn in the side of price. On the other hand we’ve got support at $96.67 with a bit more heft at $92.11.

The RSI has cooled off a bit to 45-50 which indicates that the momentum is starting to fade after being pretty overbought in recent times. The trend is still looking good as long as the price holds above $96.67.

Brent Crude Price Analysis : Trendline Support Level To Watch Out For Near $99

Brent crude is trading at $101.63 on the 2 hour chart, taking a breather after being rejected round $109.35. Now it’s testing that rising trendline which has been a big support level for the market since the March recovery.

The 200ma at $98.91 is getting close to that trendline and that converges at a pretty critical zone we’ve got to keep an eye on. The first bit of resistance is $104.04 followed by $109.35. A push above $104 could really get the bulls back in play.

The RSI has eased down to 45 which is a sign that the momentum is starting to slow down after being pretty strong in recent times.

The outlook is cautiously bullish while Brent is holding above $98.91 ; a drop below could expose $94.04.