Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Moves Lower As Pullback Continues

Natural Gas Tests Support At $2.75 – $2.80

Natural gas is losing ground as traders focus on weather forecasts and prepare for the EIA report, which will be released tomorrow. The report is expected to show that working gas in storage increased by +38 Bcf from the previous week.

Weather forecasts remain uninspiring, and traders expect that demand would not increase in the near term.

From the technical point of view, natural gas continues its attempts to settle below the support at $2.75 – $2.80. If natural gas manages to settle below the $2.75 level, it will move towards the next support, which is located in the $2.50 – $2.55 range.

On the upside, a move above the $2.90 level will open the way to the test of the resistance level at $3.00 – $3.05.

WTI Oil Retreats As Traders Bet On Potential Progress In Iran Negotiations

WTI oil is losing ground as traders focus on negotiations between U.S. and Iran. U.S. President Trump said that U.S. is ready for a ceasefire in case Iran reopens the Strait of Hormuz.

In turn, Iran said that the Strait of Hormuz would not be reopened when Iran is under attack. The positions of both sides are far away from each other, but traders focus on the potential start of serious negotiations.

Earlier, traders worried about a potential ground operation in Iran. Oil pulled back as traders shrugged off these worries and focused on negotiations.

Today, traders also focused on the EIA Weekly Petroleum Status Report. The report indicated that crude inventories increased by +5.5 million barrels, compared to analyst forecast of +0.8 million barrels.

Total motor gasoline inventories declined by -0.6 million barrels, compared to analyst consensus of -1.9 million barrels. Distillate fuel inventories decreased by -2.1 million barrels from the previous week.

U.S. crude oil imports were mostly unchanged at 6.5 million bpd. Over the past four weeks, crude oil imports averaged 6.6 million bpd.

Strategic Petroleum Reserve decreased from 415.4 million barrels to 415.1 million barrels. Domestic oil production remained unchanged at 13.657 million bpd.

It remains to be seen whether WTI oil manages to settle below the psychologically important $100 level despite hopes for a ceasefire deal. Iran is not ready to reopen the Strait of Hormuz, which is the country’s key card in the geopolitical game.

If WTI oil pulls back below the support at $97.00 – $97.50, it will head towards the next support level, which is located in the $92.00 – $92.50 range. On the upside, a move above the $102.50 level will push WTI oil towards recent highs near the $107.00 level.

Brent Oil Tested The $100 Level

Brent oil moved lower amid broad pullback in the oil markets. Traders continue to take profits off the table after the strong rally and monitor the news from the Middle East.

President Trump will address the nation today. According to recent reports, he is expected to say that the operation in Iran will end in 2-3 weeks. His comments will likely have a major impact on oil price dynamics.

If Brent oil stays below the support at $103.00 – $103.50, it will move towards the next support, which is located in the $97.00 – $97.50 range. RSI remains in the moderate territory, so there is plenty of room to gain momentum in the near term.

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