Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Dives 4% As Gulf Countries Prepare To Talk With Iran

Natural Gas Moves Lower Ahead Of The Weekend

Natural gas is losing some ground as traders focus on yesterday’s EIA report, which showed that working gas in storage increased by +40 Bcf from the previous week, and prepare for weaker demand. Weather is expected to be cooler in the second half of September, so demand will decline.

Currently, natural gas is trying to settle below the support at $2.75 – $2.80. In case this attempt is successful, natural gas will head towards the next support level, which is located in the $2.60 – $2.65 range.

On the upside, a move above the 50 MA at $2.90 will open the way to the test of the resistance level at $3.00 – $3.05.

WTI Oil Retreats As Gulf Countries Prepare To Negotiate With Iran

WTI oil pulled back as traders focused on reports indicating Gulf states planned to meet with Iran to discuss the future of the Strait of Hormuz.

At this point, the Strait of Hormuz remains de-facto blocked by Iran. Some vessels manage to get through, switching off their transponders and using help from U.S. military. The level of traffic is well below pre-war levels, and it looks that oil exporters are ready to negotiate.

The situation has changed in recent days as Houthis achieved major victory against the official government of Yemen and took control of a key port on Red Sea. After this victory, Houthis can impose control over Bab-el-Mandeb Strait, another important route for oil exports.

Houthis’ success provides Iran with leverage in negotiations. That said, there are no signs indicating that U.S. is ready to negoatiate with Iran, but oil exporters may be forced to follow Iran’s terms.

Traders used the report about potential negotiations as an excuse to take some profits off the table after the strong rally.

Currently, WTI oil is trying to settle below the psychologically important $100.00 level. In case this attempt is successful, WTI oil will head towards the nearest support, which is located in the $97.50 – $98.00 range. A move below the $97.50 level will open the way to the test of the next support level at $93.00 – $93.50.

On the upside, WTI oil needs to settle above the $103.00 level to have a chance to gain upside momentum in the near term. RSI has recently moved back into moderate territory, so there is enough room to gain momentum in case the right catalysts emerge.

Brent Oil Attempts To Settle Below $105.00

Brent oil moved below the $105.00 level as traders rushed to take profits off the table near multi-month highs.

If Brent oil settles below the $105.00 level, it will head towards the support at $101.50 – $102.00. A move below the $101.50 level will push Brent oil towards the psychologically important $100.00 level.

On the upside, a successful test of the resistance at $108.50 – $109.00 will open the way to the test of the next resistance level at $112.50 – $113.00.

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