Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Gains Ground As U.S. – Flagged Vessels Are Told To Stay Away From Iran

Natural Gas Retreats As Traders React To Weather Forecasts

Natural gas pulled back as traders focused on disappointing changes in weather forecasts. The forecasts have trended warmer over the weekend, which was bearish for natural gas markets.

Demand is expected to decline, questioning the strength of the recent rally. Meanwhile, natural gas production remains at high levels, putting additional pressure on natural gas prices.

The nearest support level for natural gas is located in the $3.00 – $3.05 range. In case natural gas declines below the $3.00 level, it will head towards the next support at $2.70 – $2.75. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in the near term.

WTI Oil Gains Ground Amid Rising U.S. – Iran Tensions

WTI oil gains ground as traders stay focused on U.S. – Iran negotiations. At this point, Iran refuses to end nuclear enrichment and does not want to discuss its ballistic missiles program.

The U.S. did not strike Iran over the weekend, which means that negotiations will continue. However, traders remain worried about the potential impact of unsuccessful talks between U.S. and Iran.

It is unclear whether countreis will reach common ground, and it looks that geopolitical premium for oil could increase in the near term, providing additional support to prices.

The U.S. Department of Transportation urged U.S. – flagged vessels to stay away from Iranian territory, raising worries about a potential strike against Iran. Traders speculate that Iran could close the Strait Of Hormuz in case of such an attack.

Such a move would trigger a huge rally in the oil markets but hurt Iran’s relations with its neighbours, so it remains to be seen whether the country is ready for drastic measures.

U.S. dollar’s pullback has also provided material support to oil markets in today’s trading session. The American currency suffered a sell-off as China told its banks to reduce exposure to U.S. Treasuries. Weaker dollar is bullish for dollar-denominated commodities as it makes them cheaper for buyers from other countries.

From the technical point of view, WTI oil is heading towards the nearest resistance level at $65.50 – $66.00. In case WTI oil manages to settle above the $66.00 level, it will gain additional upside momentum and move towards the next resistance at $70.00 – $70.50.

Brent Oil Attempts To Settle Above $69.00

Brent oil is moving higher amid broad rally in the oil markets. From a big picture point of view, oil traders will stay focused on geopolitical issues.

Traders will also monitor whether India continues to buy Russian oil after a trade deal with the U.S. President Trump said that India committed to stop buying Russian oil.

Indian officials noted that the country would maintain multiple sources of supply. At this point, it looks that a full halt of Russian oil exports to India is an unrealistic scenario, both politically and technically.

The nearest resistance level for Brent oil is located in the $69.50 – $70.00 range. A successful test of this level will open the way to the test of the next resistance at $73.50 – $74.00.

On the support side, a move below the $67.00 level will push Brent oil towards the support at $64.50 – $65.00. The test of this level could become possible in case U.S. and Iran reach a deal in the near term. Given Iran’s position on its nuclear and ballistic missiles programs, this scenario has a low probability. However, unexpected things often happen in the world of politics, so traders should be prepared for fast moves.

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