Natural Gas and Oil Forecast: WTI Dips to $88 as Pakistan Peace Talks Resume – Will $90 Reclaim?

WTI Crude Oil Outlook: Hormuz Tensions Drive Risk Premium

The fundamentals of WTI are being driven more and more by the escalating US-Iran tensions around Hormuz, a narrow waterway that handles nearly one in five of all the world’s oil shipments. Iran getting back in the loop of controlling traffic and the US going and seizing an Iranian linked vessel has everyone worried about supply disruptions big time

With the ceasefire talks having stalled as late as April, the markets are factoring in a geo-political risk premium to the price of crude oil and that’s keeping it afloat, even though the technical signals are pretty mixed. On the other hand, the US is pumping out oil at a pace that’s really cutting back on any potential upside and recent inventory builds haven’t helped the cause either.

This creates a real crapshoot where the headlines are going to dictate the price over the short term. If the tensions really start to heat up then we could see a big run up to $90-$95 but if they suddenly ease off then prices could drop right back down to $82-$85 in no time.

Natural Gas Forecast: Supply Glut Keeps Prices Under Pressure

Natural Gas is basically ignoring the geo-political tensions and instead is following the domestic fundamentals which are dead set against it. US production is still going gangbusters, storing levels are way above where they should be on the historical charts because of all the extra injections, and the weather’s been nice and mild so not much heating needed.

LNG exports and the possibility of some weird weather patterns do offer a bit of longer-term support but dont worry, they havent done enough to make up for the current supply problem yet. And on top of that, more people using renewable energy is cutting into gas demand in the power markets.

So, in the end, rallies are pretty limited and we’re only getting little movements up here. Get a demand shock then maybe this price pops but right now it’s likely to stay stuck in the doldrums with a good chance of falling back down to $2.50 in the near term.

WTI Crude Oil Price Forecast: Bear Channel Keeps Pressure Below $90

WTI crude oil is really getting squeezed, trading at around $86.90 at the moment – smack in the middle of a descending channel on the 4 hour chart. The price just bounced back up from that key $80-$82 support zone but is having a tough time getting over that major hurdle around $88-$90.

Both the 50 EMA and 200 EMA are pointing down, making it clear that the momentum is bearish. The recent candles don’t look like they’ve got any real meat to them, which makes us think that the bounce might be nothing more than a blip on the radar.

The RSI has started to come back up from oversold territory but still isn’t looking super confident. If the price gets knocked back down below $90, it’s likely to see a trip back to $83.50 or even $80. The only way we’re going to see things turn around is if we break through $92.

Brent Crude Oil Outlook: Lower Highs Signal Weakness Near $96

Brent crude is currently trading around $95.10 and is still setting lower highs, all while stuck under a descending trendline. That recent bounce from $90 support doesn’t look like it’s going to amount to much, as the price is still struggling to get back above $97.50. The 50 EMA is headed down and the 200 EMA is still sitting above it – that’s a pretty classic bearish setup.

It’s worth a look at the candlestick patterns – they’re showing a whole lot of hesitation going on, with all these small little candles and tiny wicks near the resistance area.

The RSI is kind of stuck in neutral at the moment, which is more a sign of consolidation than strength. If Brent doesn’t manage to break above $97.50, we’re going to be looking at a potential trip down to $92.50 or even $90. If we do see a breakout above $100, though, that’d pretty much put the bearish bias to rest.