Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Moves Higher As Houthis Plan To Impose Maritime Blockade On Saudi Arabia

Natural Gas Tests The $2.85 Level

Natural gas is losing ground as Freeport LNG will remain in maintenance through August.

The nearest support level for natural gas is located in the $2.75 – $2.80 range. A move below the $2.75 level will push natural gas towards the next support level at $2.50 – $2.55.

On the upside, natural gas needs to climb above the $2.90 level to have a chance to gain upside momentum in the near term. In this case, natural gas will head towards the resistance at $3.00 – $3.05.

WTI Oil Tests New Highs As Traders Focus On Houthis’ Announcement

WTI oil is moving higher as traders react to recent developments in the Middle East. Houthis announced that they would impose maritime blockade on Saudi Arabia. Earlier, Houthis claimed that they were attacked by Saudi Arabian forces.

Houthis are key allies of Iran in the region. They do not have significant firepower but may present a serious problem by using drones. Importantly, Houthis have a theoretical ability to attack vessels in the Bab al-Mandab Strait. In case it happens, oil prices would get additional support.

Iran’s attacks have recently killed three U.S. soldiers. President Trump said that Iran would “pay for that killing many times over”.

Meanwhile, mediators are trying to bring U.S. and Iran back to negotiations. Qatar and Pakistan are trying to push adversaries back to conditions under the memorandum of understanding.

Currently, WTI oil is trying to settle above the 50 MA at $84.14. In case this attempt is successful, WTI oil will move towards the nearest resistance level, which is located in the $86.00 – $86.50 range. A successful test of this level will open the way to the test of the next resistance at $91.50 – $92.00.

On the support side, a move below the $83.00 level will open the way to the test of the support level at $80.00 – $80.50.

Brent Oil Gains Ground Amid Signs Of Escalation In The Middle East

Brent oil moved higher as traders worried that Houthis could bring further disruptions to global oil markets. It remains to be seen whether Houthis are capable of damaging vessels in the Bab al-Mandab Strait. However, global oil reserves have declined significantly this year, so the market is extremely nervous. New disruptions could trigger a strong rally in the oil markets.

Brent oil settled above the 50 MA at $88.11 and climbed towards the resistance level at $90.50 – $91.00. In case Brent oil manages to settle above the $91.00 level, it will head towards the resistance level at $95.00 – $95.50. RSI remains in the moderate territory, so there is plenty of room to gain momentum in the near term.

On the support side, a move below the 50 MA at $88.11 will open the way to the test of the nearest support level at $86.00 – $86.50.

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