Oil and Gas Markets Balance Supply Growth with Seasonal Demand
Through June 30, we see the fundamental picture of global oil is a tradeoff of OPEC+ production discipline against non-OPEC growth, led by the continued production growth of US shale, and continued elevated utilization rates in key consumption regions and product demand from the transport and petrochem sectors, underpinned by seasonal summer demand and moderate changes in storage balances of key global storage nodes.
For US crude, the latest inventory data shows little net change with operating levels at key locations close to working minimums while the demand for refined product has shown strength with continued economic activity driving demand for fuels.
In US natural gas, strong production is expected to continue to set records with production driven by both oil-associated volumes and dedicated gas plays. Continued high levels of utilization for LNG export facilities will continue to send significant volumes to global markets. Inventory builds remain well underway with gas in storage above average for this time of year. Power demand fluctuates according to weather, while industrial demand remains steady.
In conclusion, we believe the US is in a supply balanced position and is able to accommodate both domestic and export demand.
Natural Gas Futures Hold $3.167 – Green Channel Momentum on the 2H Chart
Natural gas futures are at $3.167 on the 2-hour NYMEX chart. The price is holding around the 50-period red moving average near $3.17 in the green bullish channel with mixed candles. Bullish rejection wicks from the $3.099 area indicate buyers are still holding control on dips.
Momentum is neutral at the RSI hovering around 50. The $3.12 level is a strong support pivot in the volume profile with a target of $3.229-$3.254 from the Fibonacci extension. The trend is bullish above $3.099 with higher highs and lows keeping buyers active on dips.
Trade Idea: Buy $3.167, targeting $3.254, with a stop-loss at $3.12.
Natural Gas Price Forecast
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See all Natural Gas forecastsWTI Crude Oil Holds $70.09 – Blue Support Zone Defense on the 2H Chart
WTI is sitting at $70.09 on the 2-hour chart. The green/red candles have defended the support zone around $68.78 following a rejection at the red 50-period moving average near $72.53. The bullish rejection wicks shows that buyers are absorbing at this level and the support structure with the higher lows is holding. Momentum is neutral at the RSI hovering around 50.
The fair value zone in the $69-$71 area is the focus area in the volume profile. A white downtrendline is keeping the price below $71.15. The trend is technically neutral to bullish above this support zone as the broader trend is down but with higher lows and buyers buying dips.
Trade Idea: Buy $70.09, targeting $71.15, with a stop-loss at $68.78.
Brent Crude Oil Holds $73.37 – Blue Descending Channel Floor on the 2H Chart
Brent is at $73.37 on the 2-hour chart. The green/red candles were defending the blue descending channel floor near $72.48 after a rejection at the red 50-period moving average near $78.27. Bullish rejection wicks indicate that buyers are stepping in with minimal follow-through on the downside. Momentum is neutral at the RSI hovering around 50.
The $73-$74 area is the fair value zone as shown by the volume profile. The resistance area is in the $74.49-$76.08 zone. The price is technically neutral to bullish above the descending channel floor within a broader downtrend with higher lows and buying on dips keeping buyers in the picture.
Trade Idea: Buy $73.37, targeting $76.08, with a stop-loss at $72.48.
