Natural Gas, WTI Oil, Brent Oil Forecasts – Brent Oil Soars Above $100 As Khamenei Says Iran Will Open Other Fronts

Natural Gas Remains Stuck Near The $3.25 Level

Natural gas is mostly flat as traders react to the EIA Weekly Natural Gas Storage report. The report indicated that working gas in storage decreased by -38 Bcf from the previous week, compared to analyst forecast of -42 Bcf.

At current levels, stocks are +141 Bcf higher than last year and -17 Bcf below the five-year average for this time of the year.

The report was mostly bearish and hinted that demand was weaker than analysts expected. However, major problems in LNG markets due to the closure of the Strait of Hormuz could provide additional support to natural gas prices.

From the technical point of view, natural gas continues its attempts to settle above the resistance at $3.25 – $3.30. If natural gas settles above the $3.30 level, it will move towards the next resistance at $3.55 – $3.60.

WTI Oil Tests New Highs As Traders Bet On Escalation Of The Middle East Conflict

WTI oil rallied as the war in the Middle East continued and Iran’s Supreme Leader delivered his first speech.

Mojtaba Khamenei did not appear in public. Instead, his speech was read by a news anchor. He said that the Strait of Hormuz would remain closed until the war ends. He also added that Iran was ready to open other fronts in a war against U.S. and Israel.

The recent IEA decision to release oil from strategic reserves did not put pressure on oil prices as traders bet that the Strait of Hormuz could remain closed for weeks.

Interestingly, UK believes that Iran has started mining the Strait of Hormuz. According to recent reports, U.S. will likely start escorting tankers closer to the end of March. It remains to be seen whether insurers will be ready to provide coverage for these vessels and the potential costs of such coverage.

From a big picture point of view, the market prepares for a long war. Iran bets that a lengthy conflict will push oil prices to new highs and forces U.S. to stop the operation. Meanwhile, President Trump said that preventing Iran from having nuclear weapons was of far greater importance than the price of oil.

Currently, WTI oil is trying to settle above the resistance level at $97.00 – $97.05. In case this attempt is successful, WTI oil will head towards the next resistance, which is located in the $103.50 – $104.00 range.

Brent Oil Rallied Above The $100 Level

Brent oil gained strong upside momentum amid broad rally in the oil markets. Traders focus on the situation in the Strait of Hormuz and prepare for physcial deficit in the market.

At this point, the market does not believe that the release of oil from strategic reserves will have any impact on prices. The hawkish comments from U.S. and Iran provide additional support to oil prices.

Brent oil moved above the resistance at $97.50 – $98.00 and is trying to settle above the psychologically important $100 level. In case this attempt is successful, Brent oil will move towards the next resistance at $103.00 – $103.50.

Traders should note that geopolitical catalysts will play a much bigger role compared to technical factors in the upcoming trading sessions.

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