Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Dives On Profit-Taking

Natural Gas Rebounds As Traders Focus On EIA Data

Natural gas gains ground as traders react to EIA Natural Gas Storage Report. The report indicated that working gas in storage increased by +79 Bcf from the previous week, compared to analyst forecast of +80 Bcf. In the previous week, working gas in storage grew by +103 Bcf.

At current levels, stocks are +116 Bcf higher than last year and +153 Bcf above the five-year average for this time of the year.

Currently, natural gas is trying to settle back above the resistance at $2.75 – $2.80. In case this attempt is successful, natural gas will move towards the next resistance level, which is located in the $3.00 – $3.05 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

WTI Oil Pulls Back Amid Profit-Taking

WTI oil retreats as traders take some profits off the table after the strong rally. Many countries would celebrate Labour Day tomorrow, so trading volumes are thinner than usual.

There is no progress in U.S. – Iran negotiations, but traders are willing to take some money near multi-year highs. The Strait of Hormuz remains de-facto closed. The world’s key oil route is shut down by both Iran and U.S., which introduced a naval blockade of Iranian ports.

Iran’s Supreme Leader Mojtaba Khamenei issued a statement and promised to maintain the country’s nuclear and missile technology. He also signaled that Iran planned to keep control of the Strait of Hormuz.

Iran’s nuclear program was the key reason for the U.S. and Israel’s operation against the country, so Khamenei’s words indicate that sides remain far away from any deal.

It should be noted that many analysts doubt that Khamenei has real power in Iran, believing that Revolutionary Guards have become the dominant force. Anyway, it looks that Iran believes that it is in a good position despite U.S. blockade, which means that there is little near-term potential for a deal.

WTI oil made an attempt to settle above the resistance at $108.50 – $109.00 and pulled back below the $104.00 level. The nearest significant support level for WTI oil is located in the $102.00 – $102.50 range. A successful test of this level will open the way to the test of the next support at $97.00 – $97.50.

Brent Oil Dives As Traders Switch To July Contract

Brent oil pulled back as traders switched from June contract to July contract. It should be noted that June contract tested the $126 level, a move that could have been triggered by unfortunate short positions.

It remains to be seen whether pullback continues in early May as today’s move was likely driven by technical factors, including contract expiry and thin trading volume.

From the technical point of view, Brent oil attempts to settle below the support level at $111.50 – $112.00. In case this attempt is successful, Brent oil will head towards the next support at $103.00 – $103.50.

On the upside, Brent oil needs to climb back above $112.00 to gain sustainable upside momentum.

If you’d like to know more about how commodity markets work, please visit our educational area.