Natural Gas and Oil Forecast: Inventory Surprise Meets OPEC+ Hike What’s Next for Oil?

Oil Market Update: Sharp Inventory Draw Shows Tighter Inventories

Oil markets gained support as the US Energy Information Administration said commercial crude stocks decreased 1.7m barrels in the week to July 10 to a total of 409.7m barrels, versus the anticipated decline of 0.9m barrels. US crude output continued to hold at 13.9m barrels per day and refinery activity rose to 96.2% reflecting strong seasonal consumption. In addition, gasoline inventories fell 1.5m barrels while distillates inventory increased by 4.6m barrels.

OPEC+ also confirmed that it will go ahead with an extra increase of 188,000 bpd in August even while reiterating that it will keep watch on oil demand and market conditions given continued geopolitical instability.

Natural gas demand is supported by positive long-term prospects despite comfortable inventories. The EIA said the US saw a 41 Bcf injection in storage during the week to July 10, which aligned with expectations. US natural gas production in the Lower 48 rose on average to 110.3 Bcf/d in July. Rising natural gas LNG exports and data centre power needs are continuing to support longer term consumption growth prospects.

Natural Gas Technical Analysis: Can Buyers Defend $2.85 In The Face of The Next Breakout?

Natural gas price is trading close to $2.86 as prices continue to fluctuate in a trading range between the lows at $2.85 and the highs at $2.94. Recent candlestick patterns reveal that natural gas prices have traded in small ranges repeatedly around the $2.90-$2.94 area, suggesting a lack of decisive direction in the market. Natural gas price is currently trading below both the 50 Exponential Moving Average at $2.92 and 100 Exponential Moving Average at $2.99, while the descending trendline continues to pose challenges for buyers.

Price may meet with resistance ahead at $2.94 (0.236 Fibonacci) and $3.00 while the downside risk in price stands at $2.85. RSI has declined from 50 to around 42, reflecting a lack of buying strength but is still above the oversold zone. This suggests a range-bound move will be the most likely near-term outcome, as traders wait for new catalyst to emerge. My analysis is that I will only be targeting the $3.00 level once prices recover above $2.94. A move to below $2.85 might now open up more room to sell as low as $2.76.

WTI Crude Oil Technical Review: Will The $77.05 Zone Support Price Or Trigger Further Fall?

WTI crude is changing hands close to $77.98 after breaking out from below 0.382 Fibonacci level at $77.05 and falling away from recent highs near $80.17. Recent candlesticks have continued to print consecutive bearish candles, confirming that sellers are now back in the driver seat after several days of indecision.

However, price continues to trade above the ascending trendline and remains comfortably trading above the 50 Exponential Moving Average at $76.33 and the 100 Exponential Moving Average at $75.96. This suggests the recent trend recovery is still intact.

The immediate support is located at $77.05, followed by the 0.236 Fibonacci level at $73.15. Price may face resistance ahead at $80.17 and $83.37 while RSI has eased to around 50, reflecting that bullishness in oil may be fading and markets are looking more balanced. My analysis is that I will only be targeting the $83.37 level once prices recover above $80.17. A move to below $77.05 might open up room for another leg downwards to around $73.15.

Brent Crude Technical Analysis: Is Pullback Below $84.12 A Buying Opportunity?

Brent is changing hands close to $83.76 after falling back from a high near $84.12 and breaking from below 0.50 Fibonacci level at $84.07. Recent candlesticks continue to indicate that sellers have reasserted their dominance after the recent sharp rally in prices from the July lows, although price has stayed above the 0.382 Fibonacci level at $80.77, which continues to offer support to price.

Meanwhile, prices continue to trade below the 50 Exponential Moving Average at $85.10 and 100 Exponential Moving Average at $86.40, suggesting prices remain in the broader downtrend as the market waits for a decisive move higher.

RSI is currently changing hands around 54, reflecting that neither buyers nor sellers have a strong upper hand. My analysis is that I will only be targeting the $87.34 levels once prices recover above $84.12. A decline below $80.77 may now open up more room to sell as low as $76.68.