Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Moves Higher As Trump Says U.S. Needs A Couple Of Weeks To Defeat Iran

Natural Gas Tests Support At $3.00 – $3.05

Natural gas continues its attempts to settle below the support level at $3.00 – $3.05 as traders focus on strong supply and react to the developments in the Middle East.

European natural gas prices gained ground as operations at the natural gas field in the UAE were suspended after a drone attack. However, this incident did not provide sufficient support to U.S. natural gas prices.

If natural gas manages to settle below the $3.00 level, it will move towards the next support, which is located in the $2.75 – $2.80 range. A move below the $2.75 level will push natural gas towards the 50 MA at $2.54.

On the upside, natural gas needs to settle back above $3.05 to have a chance to gain upside momentum in the near term. In this case, natural gas will head towards the resistance at $3.25 – $3.30.

WTI Oil Moves Higher As Traders Buy The Dip

WTI oil is moving higher as traders stay focused on Trump’s comments on the situation in the Middle East.

President Trump said that he did not need help from NATO allies in the Strait of Hormuz. He noted that NATO was making a “foolish mistake” by staying away from the war in Iran. Earlier, European leaders said that they were not willing to get involved in the operation against Iran.

President Trump had also added that the operation should take a couple of weeks as the U.S was ahead of the plan. For markets, this comment indicates that the Strait of Hormuz will remain de-facto closed for at least two weeks.

At this point, it is clear that there is no realistic way to reopen the Strait of Hormuz without a ceasefire. The Strait of Hormuz is narrow, so the risks of a drone or a boat attack would always be present. In this situation, insurers would not be willing to provide coverage, while banks could stay away from financing such deals.

Thus, oil traders bet on a long war in the Middle East and believe that oil prices could move higher. It should be noted that recent efforts to release oil from strategic reserves failed to put pressure on oil prices, which is a bullish sign for the market.

Currently, WTI oil is trying to settle above the nearest resistance level, which is located in the $97.00 – $97.50 range. In case this attempt is successful, WTI oil will head towards the next resistance level, which is located in the $103.50 – $104.00 range.

Brent Oil Tests Resistance At $103.00 – $103.50

Brent oil gains ground as traders focus on the deficit in the oil markets. As long as the Strait of Hormuz remains closed, oil prices will get more support.

From the technical point of view, Brent oil attempts to settle above the resistance level at $103.00 – $103.50. If Brent oil manages to settle above the $103.50 level, it will head towards the next resistance level, which is located in the $108.50 – $109.00 range. RSI is in the overbought territory, but traders will ignore this factor and focus on physical flows of oil.

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