Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Gains 3% As UAE Leaves OPEC

Natural Gas Tests The $2.70 level

Natural gas is losing ground as traders focus on bearish weather forecasts. At this point, the market needs significant positive catalysts to break the bearish trend.

From the technical point of view, natural gas settled below the previous support at $2.75 – $2.80 and is trying to settle below the $2.70 level. In case this attempt is successful, natural gas will head towards the next support level, which is located in the $2.50 – $2.55 range.

On the upside, a move above the resistance at $2.75 – $2.80 will open the way to the test of the next resistance at $3.00 – $3.05. RSI is in the moderate territory, so there is plenty of room to gain momentum in the near term.

WTI Oil Rallies As Traders Bet The Strait Of Hormuz Will Stay Closed

WTI oil rallied as traders focused on lack of progress in U.S. – Iran negotiations and reacted to UAE’s decision to leave OPEC.

UAE announced that it would leave the oil-producing group to pursue independent policy. According to UAE Energy Minister al-Mazrouei, the decision was made after a “careful look at current and future policies related to level of production”.

UAE had ambitions to boost production, but OPEC and OPEC+ attempts to stabilize the market prevented the country from gaining market share. The decision marks a major shift in the oil market, and it remains to be seen whether OPEC will maintain its full force without one of the key producers. Obviously, UAE plans to raise production after leaving the group.

UAE’s decision also highlights the heavy impact of the war in the Middle East on the region. Tensions between Saudi Arabia, OPEC’s biggest producer, and UAE have been growing in recent years, and the war was the last straw that broke the relationship.

U.S. President Trump said that Iran wanted U.S. to open the Strait of Hormuz. He did not say who contacted him and whether U.S. will react to this proposal. Oil traders do not believe that U.S. and Iran have a chance to reach a deal in the near term, so oil prices keep moving higher.

In case WTI oil settles above the $100 level, it will get to the test of the resistance at $102.00 – $102.50. A successful test of this level will open the way to the test of the next resistance at $108.50 – $109.00.

Brent Oil Tests Resistance At $111.50 – $112.00

Brent oil rallies as traders bet that the Strait of Hormuz will remain closed. It looks that the market has also started to price in risks of additional escalation in the Middle East. The war may restart in case negotiations fail.

Currently, Brent oil is trying to settle above the resistance level at $111.50 – $112.00. In case this attempt is successful, Brent oil will move towards the next resistance, which is located in the $118.50 – $119.00 range.

On the support side, a move below the $108.00 level will push Brent oil towards the nearest support at $103.00 – $103.50. Most likely, Brent oil will need significant negative catalysts to move lower as the market is extremely bullish.

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