Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Pulls Back As Risks Of Military Escalation In The Middle East Decline

Natural Gas Moves Lower As Storage Build Exceeds Estimates

Natural gas is losing ground as traders react to the Weekly Natural Gas Storage Report. The report indicated that working gas in storage increased by +36 Bcf from the previous week, compared to analyst forecast of +31 Bcf. The higher-than-expected storage build put pressure on natural gas markets in today’s trading session.

At current levels, stocks are -25 Bcf less than last year and +198 Bcf above the five-year average for this time of the year.

In case natural gas pulls back below the $2.70 level, it will head towards the $2.62 level. A move below $2.62 will open the way to the test of the support level at $2.50 – $2.55.

WTI Oil Retreats As Traders Focus On Recent Developments In The Middle East

WTI oil pulls back as traders focus on U.S. attempt to put additional economic pressure on Iran. At this point, it looks that the U.S. is not ready to restart the military operation against Iran and prefers to use sanctions and naval blockade to push Iran to negotiations.

It is not clear why traders are optimistic that this strategy will work in the near term. The Strait of Hormuz may be de-facto closed for many weeks, with a limited number of vessels going with their transponders off.

From the technical point of view, WTI oil is trying to settle below the support level at $81.50 – $82.00. In case WTI oil manages to settle below the $81.50 level, it will move towards the 50 MA at $78.97. If WTI oil declines below the 50 MA, it will head towards the support level at $77.50 – $78.00.

On the upside, WTI oil needs to settle back above the $82.00 level to have a chance to gain upside momentum in the near term. In this case, WTI oil will head towards the resistance level at $86.00 – $86.50.

Brent Oil Tests Support At $86.50 – $87.00

Brent oil is losing ground as traders monitor recent developments in the Middle East and bet that oil supply will stabilize. It looks that traders were worried that U.S. would restart the military operation, while Iran could deliver strikes against oil infrastructure in the region. The probability of this scenario declined, which served as a bearish catalyst for oil markets.

That said, it should be noted that the world continues to use oil reserves at a robust pace to deal with the consequences of the blocked Strait of Hormuz.

Currently, Brent oil is trying to settle below the support level at $86.50 – $87.00. If Brent oil manages to settle below the $86.50 level, it will head towards the 50 MA at $83.29. A move below the 50 MA will push Brent oil towards the support level at $82.00 – $82.50.

On the upside, a move above the $88.00 level will open the way to the test of the resistance level at $91.00 – $91.50.

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