Natural Gas and Oil Forecast: Modest Gains Post OPEC+ Cuts; Buy Today?

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Updated: Mar 6, 2024, 11:33 GMT+00:00

Key Points:

Oil prices recover slightly amid OPEC+ cuts and demand worries.
Fed Chair Powell's testimony and U.S. job data may impact oil demand.
Crude Oil Inventories report awaited for supply-demand balance.

Crude Oil Inventories Report In Focus

Oil prices saw a marginal recovery Wednesday, with Brent crude and U.S. West Texas Intermediate ticking up after recent declines, amid supply tightness following OPEC+ output cuts.

This slight uptick comes despite demand concerns in China and the U.S., the top crude consumers, with China’s modest 2024 growth target of around 5% sparking doubts about demand acceleration.

Market focus now shifts to U.S. Federal Reserve Chair Jerome Powell’s policy testimony and upcoming U.S. job data, which could influence interest rate decisions and, subsequently, oil demand.

The extension of OPEC+ cuts until the second quarter’s end has induced supply constraints, especially in Asia, counterbalanced by U.S. crude inventory rises. Eyes will be on the Crude Oil Inventories which are coming out during the US session.

Natural Gas Price Forecast

NG Price Chart

Natural Gas (NG) hovers at $1.9880, marking a minor downtrend of 0.35%, revealing investor caution amidst volatile energy markets. The commodity’s proximity to a pivotal $1.9506 suggests potential volatility, with resistance levels at $2.0287, $2.0841, and $2.1346 posing significant thresholds for bullish momentum.

Support echelons at $1.8604, $1.8016, and $1.7257 provide cushions against further declines. The 50-day EMA at $1.8874 aligns closely with current levels, indicating underlying support.

The market’s stance is bullish above $1.9506; however, descending beneath this juncture could precipitate a notable sell-off, underscoring the crucial balance between supply expectations and demand shifts.

WTI Oil Price Forecast

WTI Price Chart

USOIL nudges upwards, marking a modest gain to $78.30, a 0.27% increase, amid fluctuating global energy demands. Positioned slightly above its pivot at $77.96, US Oil confronts key resistance at $79.03, with further hurdles at $80.20 and $81.06.

These levels signify potential turning points for bullish advancement. On the downside, support lies at $76.81, followed by $75.82 and an unusual adjustment at $75.93, offering floors against dips. The 50-day EMA stands at $78.37, closely shadowed by the price, indicating a sustained bullish inclination above $77.96.

However, dipping below this pivot could initiate a downward trajectory, highlighting the delicate balance between supply concerns and market optimism.

Brent Oil Price Forecast

UKOIL Price Chart

UKOIL experiences a slight uptick, closing at $82.17, marking a 0.23% increase amidst ongoing market adjustments. Trading just above its pivot point at $81.80, it faces immediate resistance at $83.04, with further obstacles at $84.06 and $85.14 potentially capping gains.

On the flip side, supports are established at $80.97, descending to $80.19 and $79.42, which could mitigate further dips. The positioning near the 50-day EMA of $82.49 and above the 200-day EMA of $81.44 suggests a bullish undertone, provided it remains over $81.80.

However, falling beneath this pivotal level could usher in a bearish phase, emphasizing the need for vigilance in navigating these energy market dynamics.

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About the Author

Arslan Aliauthor

Arslan, a webinar speaker and derivatives analyst, has an MBA in Finance and MPhil in Behavioral Finance. He guides financial analysis, trading, and cryptocurrency forecasting. Expert in trading psychology and sentiment.