Natural Gas and Oil Forecast: RSI Signals Balance as Traders Watch $58 Oil and $3.40 Gas

Market Overview

WTI crude oil was trading around $58.2 a barrel, holding onto recent gains despite another wild session driven by the latest round of geopolitical tensions. The market was weighing up the risks to energy supplies, but analysts were being cautious about over-playing the impact on supplies.

Despite having significant oil reserves, Venezuela accounts for less than 1% of global oil output, making it difficult for the country to have a real impact on prices, even if it faces disruptions to its exports.

The overall fundamentals were still keeping a lid on prices. The global supply was stable, Saudi Arabia had cut its official oil prices to Asia for the third month in a row, and OPEC+ had said production levels would remain unchanged through Q1. All these factors were keeping oil and natural gas prices at bay, despite significant market uncertainty.

Natural Gas Price Forecast

Natural gas futures on the 4-hour chart were trading at $3.43 and pulling back after failing to hold above the rising channel that had been guiding prices higher right up until late December. A series of bearish candles marked the pullback, but the close was firm, indicating the selling was contained rather than panicked.

The price had now slipped below the channel’s midline and was testing a horizontal support area between $3.40 and $3.35. This specific area had been a key consolidation zone in the past and was only just above the $3.30 support level.

Resistance was layered up at $3.60, with a further level at $3.79, where the broken channel and a descending trendline converge. Trade idea was to sell rallies towards $3.60, with a target of $3.30 and a stop-loss above $3.80.

WTI Oil Price Forecast

WTI crude oil on the 4-hour chart was trading at $57.90 and holding its own within a broad consolidation after rebounding from the $55.20-$55.50 demand zone. WTI was trading within a short-term range between $57.45 and $58.80, with resistance at the higher end and support at the lower.

This range also happened to be a prior horizontal supply zone. The rebound had also paused near the 38.2% Fibonacci level of the December decline, a common pause level.

The RSI was hovering around the midline, a sign that the price was in a balance, neither strong on the upside nor the downside. A clear break was needed to show us which direction it would take. The trade idea is to sell near $57.45, targeting $58.80, with a stop-loss below $56.55.

Brent Oil Price Forecast

Brent crude oil on the 4-hour chart was trading at $61.40, and after rebounding from the $58.70-$59.00 demand zone, it was now stabilising. The price remained confined within a broader descending channel, with the upper trendline near $62.20-$62.30 limiting its upside attempts. The recent candlesticks had shown quite small bodies with mixed wicks, suggesting short-term indecision rather than a strong trend.

The Brent had retraced close to the 38.2% Fibonacci level of the prior downswing, which was a level that often acts as a pause zone. The immediate support area was at $61.05, with a further level at $60.00, while the resistance was layered up at $62.26 and $63.20.

The RSI was hovering around the midline, indicating a neutral bias. The trade idea was to sell near $61.00, targeting $62.25, with a stop-loss below $59.95.