Natural Gas, WTI Oil, Brent Oil Forecasts – NatGas Falls on Below-Average Inventory Draw

Natural Gas Weakens After EIA Storage Data

In the U.S. natural gas market, futures moved lower following the Energy Information Administration’s (EIA) report of a less-than-average weekly decrease in inventories. This marked the fifth consecutive week of below-average reductions. The EIA reported a decline of 40 billion cubic feet, leaving stocks significantly higher compared to the previous year and well above the five-year average for the week. Analysts had predicted a slightly larger decrease.

Stalled Rally in Oil Prices

On Thursday, WTI and Brent oil prices displayed minimal movement in a fluctuating trading session. Market participants are looking for a driving force to resume the rally that appears to have temporarily halted this week. Delayed interest rate cuts in the U.S. are keeping significant gains in check, although positive trade data from China, the leading oil importer, suggests strong demand prospects.

Impact of U.S. Data and Interest Rate Expectations

Oil prices approached their highest level for 2024 on Wednesday but retreated following U.S. reports showing a less-than-expected rise in oil stocks and a decrease in fuel inventories, indicating solid demand. The market is preparing for the possibility that the U.S. Federal Reserve might postpone its planned interest rate reduction to later in 2024. This anticipation, reflected in a Reuters poll of FX strategists, could lead to a stronger U.S. dollar, which might adversely affect oil demand by making the dollar-priced commodity more expensive for buyers using other currencies.

Global Trade and Economic Recovery Indicators

China’s import and export growth outperforming forecasts presents a hopeful sign for global trade recovery. Early 2024 saw a 5.1% increase in China’s imports, with crude oil purchases rising to around 10.74 million barrels per day, driven by fuel demands during the Lunar New Year.

Natural Gas

Natural gas futures are lower late Thursday with traders setting their sights on a 50% to 61.8% correction of the recent rally from $1.607 to $2.009. The target zone is $1.808 to $1.765. On the upside, the major resistance remains the 50-day moving average at $2.082.

WTI Crude Oil

Daily Light Crude Oil futures are showing a mixed performance on Thursday, which hasn’t disrupted the overall uptrend but has merely postponed the anticipated rally.

On the downside, the major support is the 200-day moving average at $76.79. This represents the long-term trend. The March 1 high at $80.85 is a potential trigger point for an acceleration to the upside.

Brent Crude Oil

Brent Crude Oil is putting in a better performance than WTI crude oil on Thursday. However, the price action remains subdued. Earlier in the session, the market solidified its support on the 200-day moving average at $82.05, but without a catalyst, the rally stalled.

The triggerpoint for an acceleration to the upside is the March 1 main top at $84.32.