Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Prices Retreat From Session Highs

Natural Gas Retreats Ahead Of Tomorrow’s EIA Report

Natural gas pulled back as traders took some profits off the table after the rebound, which was triggered by the war in the Middle East.

The closure of the Strait of Hormuz and attacks on Qatar’s LNG export plant fueled a strong rally in the European natural gas markets. As a result, demand for U.S. LNG is expected to increase.

However, traders also focus on domestic demand and react to weather forecasts, which point to low demand in the upcoming days.

Traders also prepare for the EIA report, which will be released tomorrow. Analysts expect that working gas in storage declined by -122 Bcf from the previous week.

From the technical point of view, natural gas made an attempt to settle above the resistance at $3.00 – $3.05 but lost momentum and pulled back towards the $2.90 level. In case natural gas settles below $2.90, it will move towards the nearest support, which is located in the $2.70 – $2.75 range.

WTI Oil Pulls Back From Session Highs

WTI oil is swinging between gains and losses as traders react to the news from the Middle East.

Recent reports indicated that Iran contacted U.S. and asked for negotiations. Iran has quickly denied these reports, but they have put some pressure on oiil markets

Meanwhile, the Strait of Hormuz remains de-facto closed. Two or three ships that were leaving the Persian Gulf managed to get through this key waterway today.

President Trump indicated that U.S. will protect ships that are going through the Strait of Hormuz. The U.S. military reported a number of successful attacks on Iranian military vessels, indicating that Iran has almost lost its naval power.

However, there are no signs that U.S. could ensure the safety of passage through the Strait of Hormuz in the near term. The Strait of Hormuz is rather narrow, so Iran can deal damage to ships even if it loses all of its military ships.

At this point, some traders believe that U.S. and Israel have already put significant pressure on Iran, which will have to capitulate. These traders have been taking profits off the table in today’s trading session.

Today, traders also had a chance to take a look at the EIA report. The report indicated that crude inventories increased by +3.5 million barrels from the previous week, compared to analyst forecast of +2.3 million barrels.

WTI oil continued its attempts to settle above the resistance level at $74.50 – $75.00. If WTI oil manages to settle above the $75.00 level, it will head towards the resistance at $77.50 – $78.00. A move above the $78.00 level will signal that traders are seriously worried about a potential deficit in the oil markets.

Brent Oil Declined As Traders Reacted To Geopolitical Developments

Brent oil has also pulled back from session highs as traders monitored the developments in the Middle East.

U.S. Defense Secretary Pete Hegseth said that Iran’s military capabilities were evaporating, which means that U.S. may soon control the passage through the Strait of Hormuz. However, military conflicts are often unpredictable, so traders remain cautious.

Brent oil failed to settle above the resistance level at $83.50 – $84.00 and pulled back below the $82.00 level. if Brent oil settles below $82.00, it will head towards the support, which is located in the $78.50 – $79.00 range.

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