Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Prices Pull Back As IEA Releases Reserves

Natural Gas Moves Higher As Traders React To The EIA Report

Natural gas gains ground as traders focus on the EIA Weekly Natural Gas Storage report. The report indicated that working gas in storage increased by +35 Bcf from the previous week, compared to analyst forecast of +31 Bcf.

At current levels, stocks are +177 Bcf higher than last year and +47 Bcf above the five-year average for this time of the year.

Traders also focused on the news from Qatar. Iran’s strikes against the country damaged 17% of Qatar’s LNG export capacity. According to QatarEnergy CEO Saad al-Kaabi, it will take 3-5 years to repair the damaged facilities.

Currently, natural gas attempts to settle above the resistance at $3.25 – $3.30. In case this attempt is successful, natural gas will move towards the next resistance level, which is located in the $3.50 – $3.55 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

WTI Oil Retreats As IEA Members Release Oil From Strategic Reserves

WTI oil moved lower as traders focused on efforts to boost supply in the oil markets.

IEA has recently said that oil from reserves has started to flow to markets. IEA expects that it would reduce the deficit and put pressure on oil prices.

IEA has also provided the list of countries that would be contributing oil from their strategic reserves. U.S., which is expected to release 172.2 million barrels, will be the biggest contributor.

Japan would contribute 79.8 million barrels, while Canada would release 23.6 million barrels of oil. In total, IEA members would release 426 million barrels of oil to push prices towards lower levels.

Interestingly, U.S. signaled that it would lift sanctions on Iranian oil floating at sea. Earlier, U.S. lifted sanctions on Russian oil that was already at sea, but this move did not put pressure on oil prices.

President Trump has recently said that he was not putting U.S. troops anywhere. The potential threat of a ground operation in Iran could serve as a major bullish catalyst for oil prices, as it would be a huge escalation of the conflict.

Trump has also noted that Israel would not attack the South Pars Field. Iran has previously said that it would deliver significant strikes against energy infrastructure in the region in case the South Pars Field is attacked again.

WTI oil failed to settle above the $100.00 level and pulled back towards $96.00. In case WTI oil settles below the $96.00 level, it will head towards the nearest support, which is located in the $90.00 – $90.50 range.

Brent Oil Pulls Back Amid Profit-Taking

Brent oil made an attempt to settle above the resistance at $118.50 – $119.00 but lost momentum and pulled back as traders rushed to take profits near multi-year highs.

Trades have decided to take some off the table as IEA members have started to release oil from strategic reserves.

If Brent oil settles back below the $108.50 level, it will move towards the nearest support, which is located in the $103.00 – $103.50 range.

On the upside, Brent oil needs to stay above $109.00 level to have a chance to gain upside momentum in the near term.

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