Natural Gas and Oil Forecast: WTI Battles Descending Channel – Is $100 the Next Stop?

Market Overview

USOIL fundamentals are being held hostage by the looks like a serious risk out of the Middle East. President Trumps extension of the ceasefire may have bought some time but 2nd round peace talks are dead in the water because Iran wont even come to the table unless the US lifts its naval blockade. And to make matters worse Iran has been having a go at multiple commercial ships in the Strait of Hormuz, effectively saying its closed to shipping due to alleged violations.

This narrow strait is critical – 20% of the worlds seaborne oil passes through it – so its physical supply issues and production shut-ins are keeping a risk premium high. Some of the offset comes from US domestic production and inventories but basically the uncertainty is keeping people on edge.

NG on the other hand isnt being held hostage by the same oil geopolitics that are making USOIL such a worry. Instead its under pressure because of soft domestic balances. The mild spring weather has taken a chunk out of heating demand and so storage levels are above average and they keep getting injected. US production is strong – a bit knocked about by some maintenance but still going strong – and shoulder season consumption is low, so weve got a supply surplus on our hands. But we do have some structural support from LNG export growth. For the coming weeks expect bearish pressure with limited upside from weather driven demand.

Natural Gas Price Forecast: NG Hits A Wall Below $2.72 – And It Aint Going Away

Natural Gas (NG) is stuck at $2.71 at the moment – and it looks like it has run into a pretty solid wall at that $2.78 resistance zone. All these attempts to get up to $2.72 and beyond have been rolling back – which tells you that the bears are still in control. And it looks like price is still a long way from the two EMAs – its below both of them, and the only way to change that is to get above that trendline.

Candlesticks are still showing a lot of hesitation near that resistance, and the upper and lower wicks are telling the same story – selling pressure. RSI is still just above 50, but momentum is still pretty weak, and I just dont see anything to get excited about here. If we do get a rejection below $2.78, then its probably going to be heading back down again – and that support zone down at $2.63 or $2.56 is the next likely stop.

WTI Oil Price Forecast: Makes A Stab at $94.50 – Can It Sustain The Rebound?

WTI (USOIL) is hovering around $94.50 at the moment, pushing higher after that nice rebound from the $85.30 zone where buyers stepped in. Price is still up and down in that descending channel, but the last few candles are looking pretty bullish – you can see higher lows forming above that 200 EMA which is sitting just below $91.10.

And thats not all – the 50 day EMA has stopped going down, which suggests that the pressure from below is easing off a bit. RSI is creeping up towards 60, so the bulls are definitely building some momentum here – but its not quite overbought yet.

The first thing to watch out for is a test at $95.38 – if that level holds, then the channel top at $100.68 is the next big target. But if we dont see a clean break above this channel, then price might just start heading back down again, and that 91.10 zone could well be the next place to stop.

Brent Oil Price Forecast: Aim at $103.75 – Breakout Time?

Brent (UKOIL) is trading at $103.75 for the moment, and its definitely worth keeping an eye on – especially if it can push above this key resistance zone. It has come a long way from down near $92.50, not just in terms of price but also in terms of momentum – price has formed a series of higher lows, and has reclaimed that 50 day EMA.

The candlestick patterns are all looking pretty bullish – its a sea of green up there, with not a lot of selling interest in sight. RSI is creeping up towards 60, which is saying the same thing – the bulls are getting stronger.

If we can get a clean breakout above $103.75, then the next big target is probably going to be $107.30 – but get a rejection and that could be heading back down to $100.00 or even lower – support is under $96.65, where that 200 EMA is waiting.