Natural Gas and Oil Forecast: Massive Inventory Build vs. Geneva Diplomacy – A Shield Against $70?

Geopolitical Friction Infuses $10 Risk Premium into Energy Markets

Energy futures are edging higher, albeit cautiously, as the high-wire act of diplomacy in Geneva creates a delicate situation for the crude complex in the short term. Brent crude is nudging $71.04, while WTI has reached $65.57. That price action, however, is largely being propelled by a pretty big risk premium – a $10 per barrel premium, built right in – due to the specter of potential supply disruptions coming out of the Middle East.

While a diplomatic collapse could send WTI surging past $70 on a moment’s notice, any gains are being kept under wraps right now by a huge 16million barrel build in US inventories – way more than the 1.5million barrel build that was expected. To balance out the potential for instability in OPEC’s third-largest producer, OPEC+ is considering a production hike of 137,000 barrels per day come April – which is a strategic move to stabilize the global supply picture amidst all the friction.

The institutional crowd seems to think that while the threat to Iranian output is the top upside driver at this point, the sheer volume of US stockpiles is the one thing that’s really putting a lid on prices.

Natural Gas Price Forecast: $2.85 Breakdown Puts $2.75 Support in Focus

Natural Gas futures on the 2 hour chart are actually sitting at around $2.819 right now. Unfortunately, that’s below the $2.85 horizontal support line, which is really a pretty important level for a commodity like this. If you take a look at the recent candles, you can see these consecutive bearish bodies with very little going on in the way of lower wicks, and that’s a pretty clear sign that the sellers are having their way here rather than having some sharp rejection.

The price is still being held back by that 50 EMA around $2.95 but the 200-EMA near $2.90 has actually turned into a bit of a roadblock. If $2.85 fails to get back on top of things then we’re really looking at $2.75 as the next big stop before we get down to $2.66.

Trade idea: Sell below $2.80 targeting $2.75, stop above $2.90.

WTI Crude Oil Price Forecast: $65.20 Support Holds as Triangle Builds on 2H Chart

WTI crude oil on the 2 hour chart is basically stuck around $65.45 right now after it got rebuffed from the $66.80-$67.20 resistance area. The recent candles are painting these tight, smaller bodies with big upper wicks and that’s a pretty clear sign that there’s some downward pressure near that 0.236 Fibonacci level at $65.99.

But the great news is the price is still holding above that important 0.382 Fib at $65.20 which is also a pretty relevant horizontal support & a spot where the price previously broke out from. A rising trend line that started at $61.86 is still intact & forming a neat little triangular structure.

The 50-period EMA near $65.30 is running interference as dynamic support, and the RSI is sort of meandering around 45-50 which is about as neutral as you get in terms of momentum.

Trade idea: Buy above $66.00, aiming for $67.20, stop-loss below $65.20.

Brent Crude Oil Price Outlook: $70.22 Support Tested as Triangle Tightens Below $71.00

Brent crude on the 2 hour chart is sitting at around $70.74, caught in a pretty tight squeeze between $70.22 support and the $71.02 resistance at the 0.236 Fibonacci level. But what’s really telling is the recent candles – narrow bodies and that repeated upper wick tailing off below $71.00 is a pretty clear giveaway that there’s a lot of supply at that specific price level.

Still, the price is hovering above the 0.382 Fib at $70.22 which also happens to be a pretty relevant prior breakout area & a short-term horizontal support line. An ascending trend line that started at $66.84 continues to guide this whole thing and is forming a tightening triangular structure which never hurts.

The 50-EMA near $70.60 is doing its thing as dynamic support, and the RSI is actually sitting right in the middle of 48-50 which is pretty much perfect balance in terms of momentum.

Trade idea: Buy above $71.05 targeting $72.30, stop-loss below $70.20.