Natural Gas and Oil Forecast: WTI Breakdown Below $92 While Brent Tests $94 — NatGas Holding Strong?

Oil and Natural Gas Markets Remain Balanced as Ceasefire Holds

The oil and natural gas markets have remained steady since the conditional cease-fire was put in place more than nine weeks ago. As tanker traffic resumed gradually from the beginning of June, oil prices continued to trade quietly during the first week of June on the hope for further supply restoration of the Strait of Hormuz.

The deal had eliminated the bulk of the geopolitical risk premium. The two oil benchmarks of WTI and Brent were balanced on the back of the continued robust crude from the United States alongside disciplined OPEC+ supply and growing non-OPEC sources from Brazil, Guyana, and Canada. Iranian supply and that of the region as a whole remained yet to be back at full levels as the truce continues. While the demand side has seen gradual recovery, especially in Asia, overall global demand growth for the year is forecast to be moderate amid high borrowing rates and soft consumer spending in mature countries.

Liquified natural gas was trading on quiet levels as natural gas prices in the United States and Europe continue to be backed by strong inventory builds due to the warmer spring. The deal has relieved some of the geopolitical pressure on oil shipping routes, including for LNG from the Middle East, though Asian and European demand are expected to remain firm for the near future.

Attention is now turning to next week’s inventory data reports and potential next moves from OPEC+ as truces have helped reduce immediate risks of supply disruptions though the market is aware it could be tenuous.

Natural Gas Futures Pulls to $3.169 – Blue Channel Retest After Surge

Natural gas price on the 2h NYMEX futures chart fell to $3.169 after the red candles retraced from recent highs and retraced the red 50-period MA near $3.20 as price printed the blue ascending channel with a price structure above $3.10 from lower lows from May lows near $2.978 while also printing higher lows with rejection wicks and supply absorption from higher highs. Also, RSI is printing near 52 with neutral price momentum while price prints volume confirming recent price action.

Next resistance will be at $3.195 to $3.256 in the next 2h Fib extension zone. In general, natural gas futures prints above $3.10 as price trades with a blue ascending channel from May lows.

Trade Idea: Buy Natural Gas Futures at $3.169, buy target $3.256, stop at $3.10.

WTI Crude Oil Slides to $91.15 – Blue Channel Breakdown Pressures

The price for WTI Crude Oil on the 2h chart dropped to $91.15 as the red continuation candles sold off the price action from the blue ascending channel floor near $92.50, down to red 50-period MA at $94.90 and also near the recent swing lows. Bearish engulfing bodies are printing lower lows along with red continuation wicks selling from $102 highs and distribution down from the recent swing highs.

Now, the price accelerates toward $89.14 to $88.44 in the next 2h Fib extension zone. Also, RSI prints below 45 for momentum loss as volume confirms the $98.21 level as failed fair value with sellers in control while the white descending trend line from May caps the market at $94.00. In general, WTI Crude Oil price prints below the $92.50 support level and trades inside the price action from a price structure that is definitely bearish on the 2h time frame while sliding below an extended down channel. In general, $94.90 is firm higher timeframe resistance.

Trade Idea: Short WTI Crude Oil price at $91.15, sell target $89.14, stop at $92.50.

Brent Crude Oil Dips to $94.06 – Blue Descending Channel Rejection

In the case of the price for Brent Crude Oil, the red candles are testing the blue descending channel floor near $95.50 and also the red 50-period moving average at $98.21 as price prints below $94.06 and on the 2h time frame chart. Price prints lower highs from recent distribution and sells near pivot $93.84 while RSI prints near 46, as volume prints $97.62 as a major supply level in the next Fib zone at $92.54 to $91.66.

In the case of Brent Crude Oil price structure, the price trades below the $97.62 supply level and sells into a price action with the blue descending channel floor support on the 2h chart while price trades below an extended downtrend from $110 highs.

Trade Idea: Short Brent Crude Oil at $94.06, sell target $92.54, stop at $95.50.