Natural Gas and Oil Forecast: Qatar Mediation Cools Oil as Saudi Attacks Persist, Can WTI Break $102.45?

Oil Eases on Diplomacy Hopes, but Supply Risks Stay Front and Center

Crude markets opened the week weighing a new diplomatic push against continued attacks on Saudi Arabia. At the same time, the International Energy Agency (IEA), which advises major oil-consuming countries, is warning that the disruption will last well beyond this year.

Brent: Mediation Versus Saudi Attacks

Oil fell on Monday on hopes that hostilities between the US and Iran could ease, Reuters reported. Qatari mediators traveled to Tehran on Sunday as part of a de-escalation effort, meaning talks aimed at calming the conflict, coordinated with Washington, according to an official briefed on the discussions. Even so, the drop has been modest because the Houthi attacks on Saudi Arabia have not stopped. Those attacks drove Brent to a 6% weekly gain last week, and the Houthis said they hit a Saudi airport and oil facilities again on Saturday.

The longer-term picture stays tight. IEA Executive Director Fatih Birol said in Singapore on Monday that he sees no credible path for energy markets to return in 2027 to where they were before the Iran war. So the IEA expects supply problems to last through next year, not just this winter.

WTI: Domestic Supply Remains Lean

US commercial crude inventories, the oil held by companies rather than the government’s emergency reserve, fell for a third straight week to 412.5mn barrels in the week to October 16, according to the EIA. That leaves stocks about 3% below the five-year average, the normal level for this time of year, so there is less cushion if supply is disrupted. The next weekly report arrives on Wednesday, the same day the Fed announces its decision at the end of its October 27-28 meeting.

Natural Gas: Mild Weather Breaks the Winter Premium

US gas futures fell about 6% to a two-month low on Friday as forecasts turned milder and pointed to weaker demand next week, Reuters reported. Futures for calendar 2027, contracts for gas delivered across all of next year, hit an almost five-year low, a sign the market sees little risk of a winter shortage. Supply is back too. LSEG data show daily output near 113.3 bcfd, or billion cubic feet a day, over the past week after earlier disruptions.

What prices are ignoring is that storage is getting tighter. Analysts expect the storage surplus over normal levels shrank to 0.7% in the week to October 23. Traders are leaning on the warm forecast instead. Hedge funds have built a record short position, meaning bets that prices will fall, in US gas futures, Bloomberg reported, based on CFTC data. That cuts both ways, because a sudden cold snap could force those traders to buy back their bets and push prices up quickly.

WTI Technical Analysis: USOIL Holds $100.60 as $102.45 Comes Into Focus

WTI is trading near $100.97 on the 2-hour chart. Oil jumped close to $104.38 before sellers pushed it back to the $100.60 zone. That level used to block rallies and is now acting as a floor, which often happens once resistance breaks. A rising trendline, a line connecting higher lows, still supports the uptrend.

Support, where buyers tend to step in, starts at $100.60, then $97.47. Resistance, where sellers tend to step in, is $102.45, then $104.38.

RSI, which measures the strength of recent buying and selling, has cooled to about 51, which is neutral. I see a slight bullish lean while WTI holds above $100.60. A move above $102.45 would favor buyers, while a close below $97.47 would break the uptrend.

Brent Technical Analysis: UKOIL Drops to $109.13 Support After $117.36 Rejection

Brent is trading near $109.66 on the 2-hour chart. After touching $117.36, it fell sharply in one large candle, losing nearly $8. Price is now resting on its own rising trendline, just above $109.13.

The first support is $109.13, then $107.25. On the upside, $111.56 is the first resistance, followed by $114.79.

RSI has dropped from overbought, meaning prices had risen too fast, to about 37. Brent keeps a slight bearish lean while it stays below $111.56. A close below $107.25 would break the uptrend, while a move above $111.56 would favor buyers.

Natural Gas Technical Analysis: NG Breaks Below $2.68 as $2.49 Comes Into Focus

Natural gas is trading near $2.52/MMBtu on the daily chart. Prices have broken below the $2.68 floor that held since August and opened with a gap lower, meaning the session started well below the previous close. That shows sellers are firmly in control.

The first support is $2.49, then $2.33. The broken $2.68 floor is now the first resistance, followed by $2.92.

RSI is near 29, so gas is oversold, meaning it has fallen fast and a short bounce is possible. In my view, the bias stays bearish while prices remain below $2.68. A close below $2.49 would open the way to $2.33.