Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Moves Lower Ahead Of U.S. – Iran Talks

Natural Gas Rebounds After Strong Pullback

Natural gas attempts to rebound as traders prepare for the EIA Weekly Natural Gas Storage report, which will be released tomorrow.

Analysts expect that working gas in storage decreased by -36 Bcf from the previous week. The previous report showed that working gas in storage declined by -144 Bcf.

In case natural gas manages to settle above the $3.90 level, it will move towards the nearest resistance, which is located in the $3.00 – $3.05 range. A move above this level will push natural gas towards the $3.25 level.

On the support side, the nearest support level for natural gas is located in the $2.80 – $2.85 range. A successful test of the $2.80 level will push natural gas towards the next support at $2.55 – $2.60.

WTI Oil Moves Lower As Traders Focus On The Disappointing EIA Report

WTI oil is losing some ground as traders react to the EIA Weekly Petroleum Status Report.

The report indicated that crude inventories increased by +16 million barrels from the previous week, compared to analyst consensus of +1.8 million barrels. At current levels, crude inventories are about 3% below the five-year average for this time of the year.

Gasoline inventories decreased by -1 million barrels, while distillate fuel inventories grew by +0.3 million barrels from the previous week.

Crude oil imports increased by 136,000 bpd, averaging 6.7 million bpd. Over the past four weeks, crude oil imports averaged 6.5 million bpd.

Strategic Petroleum Reserve remained unchanged at 415.4 million barrels as the U.S. did not buy oil for strategic reserves.

Domestic oil production decreased from 13.735 million bpd to 13.702 million bpd. In recent weeks, domestic oil production stabilized near the 13.7 million bpd level.

WTI oil has recently made an attempt to settle below the $65.00 level but failed to develop sufficient downside momentum and rebounded towards the $65.50 level.

In case WTI oil manages to settle below $65.00, it will head towards the $62.00 level. RSI is in the moderate territory, so there is plenty of room to gain momentum in the near term.

Brent Oil Is Losing Ground As Traders Prepare For U.S. – Iran Nuclear Deal Talks

Brent oil  has also pulled back as traders reacted to the EIA report and waited for U.S. – Iran negotiations.

These negotiations will take place in Geneva, Switzerland, on Thursday. Ahead of the talks, Iranian Minister of Foreign Affairs Abbas Araghchi said that the deal with the U.S. was within reach.

In his recent State of the Union speech, U.S. President Donald Trump said that Iran was the world’s number one sponsor of terror and that he would not allow the country to have a nuclear weapon.

At this point, the oil market pulls back due to bearish fundamentals, but traders are not ready to increase their short positions due to geopolitical risks.

Traders will wait for the third round of U.S. – Iran negotiations and react to first news from these talks. Most likely, tomorrow’s trading session will be volatile, so traders should be prepared for fast moves.

From the technical point of view, Brent oil is trying to settle back below the $71.00 level. In case this attempt is successful, Brent oil will move towards the nearest support, which is located in the $69.50 – $70.00 range.

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