Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Gains 4% As Russia – Ukraine Talks Deliver No Progress

Natural Gas Tests Support At $3.00 – $3.05 As Weather Forecasts Stay Bearish

Natural gas remains under pressure as traders focus on longer-term weather forecasts, which indicate that demand will fall after February 25.

Natural gas production remains at high levels, so the market is well-supplied. According to recent EIA report, stocks are -130 Bcf below the five-year average for this time of the year. Lower stocks provide some support to natural gas prices.

However, traders will likely focus on weak demand, so natural gas has a decent chance to gain additional downside momentum in the upcoming trading sessions.

Currently, natural gas is trying to settle below the $3.00 level. In case this attempt is successful, natural gas will head towards the next support, which is located in the $2.70 – $2.75 range.

WTI Oil Soars As Geopolitical Risks Increase

WTI oil rallies as traders react to geopolitical developments. Russia and Ukraine failed to achieve significant progress during negotiations in Geneva.

Both sides noted that talks were difficult but signaled that negotiations would continue.

Hungary halted diesel shipments to Ukraine as oil flows through the Druzhba pipeline were halted. Hungary believes that Ukraine has shut the pipeline, which transports oil from Russia to Hungary, without any technical reason.

At this point, Hungary is searching for alternative routes and plans to transport Russian oil through Croatia.

Traders also focus on the fate of U.S. – Iran negotiations. While Iran is expected to reveal its nuclear deal proposals within two weeks, some traders are ready to bet that U.S. will strike the country to put more pressure.

Interestingly, the market sentiment changed extremely quickly. Yesterday, traders were selling oil amid progress in U.S. – Iran talks. Today, they decided to focus on rising risks of military action against Iran.

The nearest resistance level for WTI oil is located in the $65.50 – $66.00 range. In case WTI oil manages to settle above the $66.00 level, it will move towards the next resistance at $70.00 – $70.50. In case the move is triggered by geopolitical developments, WTI oil may quickly get to the test of the $70.00 level.

Brent Oil Attempts To Settle Above The $70.00 Level

Brent oil gained strong upside momentum amid rising geopolitical risks. Traders worry that Iran may close the Strait of Hormuz in case of military escalation.

It should be noted that Iran has recently conducted naval drills in the Strait of Hormuz. The country did not use this option last summer during the conflict with Israel and did not react to U.S. strikes against its nuclear program.

However, the situation has changed, and it looks that Iran is ready to use this radical option in case negotiations fail and U.S. delivers strikes.

Disappointing Russia – Ukraine talks also provided material support to Brent oil in today’s trading session.

From the technical point of view, Brent oil is trying to settle above the nearest resistance, which is located in the $69.50 – $70.00 range. In case this attempt is successful, Brent oil will move towards the next resistance level at $73.50 – $74.00. RSI is in the moderate territory, and there is plenty of room to gain momentum in case the right catalysts emerge.

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