Natural Gas and Oil Forecast: WTI Hits $115 Resistance – Will Supply Shocks Spark $120?

Oil and Gas Outlook: Supply Shock Keeps Prices Elevated Amid Volatility

Crude oil prices have been bouncing all over the place, currently stuck between $112 and $115 due to supply disruptions caused by the simmering tensions in the Middle East which have everyone in the market on high alert.

With a chunk of the world’s oil supplies – about 20% of the whole shebang – passing through the Strait of Hormuz, prices for WTI have rocketed up nearly 20% in a month and a whopping 90%+ over the past year, totally reflecting how strongly people are factoring in the risk of more disruptions. With US crude you’re looking at premiums of $30 to $40 on top of the current price in spot markets.

Natural gas is getting just as spooked by the thought of supply shifts and people looking to substitute other fuels. It’s worth noting that while there is still the risk of prices shooting up to $150 if the disruption persists, the occasional ceasefire agreement that gets announced seems to make everyone nervous and triggers a sharp price drop.

Natural Gas Technical Outlook: Range Holds Near Key Support

Natural gas is just hanging around $2.80, trying to break the ice above a key zone at $2.75-$2.78. The price is still below the descending trendline & its also below the 50 day moving average which makes things a bit of a bearish picture – even though the short term is just holding on by its fingernails.

RSI is in a pretty neutral state as its hovering around mid-levels, which isnt giving us a huge amount to go on in terms of momentum. A break below $2.75 could send the price careening down towards $2.65, whereas a recovery above $2.90 might just clear the way for it to head on up to $3.05.

Trade idea: Sell when it goes below $2.75 & its heading down – target $2.65, stop loss above $2.90.

USOIL Technical Outlook: Bulls Stall Below $115 Resistance

WTI crude is hanging around $114-$115 just below a stubborn descending trendline and the key resistance at $115.40. It’s been a wild ride – price has rose pretty high but now its the kind of place it could maybe have a bit of a pullback – with momentum stalling out as RSI edges towards overbought territory. The 50 day simple moving average is still propping up the uptrend, even though higher lows still remain intact almost.

A breakout above $115.50 might let the price head up towards $119-$120, whereas a failure there would bring a pullback. The worrying scenario here is a pullback all the way down to $111.00 & then to $108.20.

Trade idea: Sell when this gets below $115.50 – aim for $111, use a stop just above $116.50.

UKOIL Technical Outlook: Brent Consolidates Near Key Supply

Brent crude is just floating around $110-$111, stuck at resistance around $112-$114. What we are seeing is a series of bounces higher that are still being propped up by an ascending trendline, while the 50 day moving average continues to support the price action from below.

The state of the RSI is nothing to get too excited about at the moment – its sitting in the middle which is just neutral. If we do get a break up through $112.00 then we might see the price go up towards $114+ but a drop below $109.00 might start to worry us as we may see it head towards $103.50.

Trade idea: Buy above $112 – aim for $114.50, stop loss below $109.