Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Pulls Back Below $100 As Traders Wait For G7 Decision On Reserves

Natural Gas Retreats Amid Profit-Taking

Natural gas prices moved lower as traders rushed to take profits off the table despite tensions in the Middle East.

The Strait of Hormuz remains closed, but it looks that traders are worried that domestic demand will be insufficient to keep prices at current levels.

From the technical point of view, natural gas needs to settle below the support at $3.00 – $3.05 to gain additional downside momentum in the near term.

On the upside, the nearest resistance level for natural gas is located in the $3.25  – $3.30 range. A move above the $3.30 level will push natural gas prices towards the resistance at $3.50 – $3.55.

WTI Oil Declined Below The $100 Level In Epic Intraday Reversal

WTI oil made an attempt to settle above the $120 level as traders reacted to the war in Iran.

UAE, Kuwait, Iraq, and Saudi Arabia have already been forced to cut production amid lack of storage.

Over the weekend, Iran continued to attack oil-producing countries in the region. U.S. and Israel delivered strikes against Iran. Analysts and politicians have started to talk about a weeks-long conflict, which is bullish for oil markets.

Iran has finally elected a new Supreme Leader, who will rule the country. Mojtaba Khamenei, the son of Ali Khamenei, who was killed in the first hours of the military operation against Iran, will head Iran. President Trump has already said that he was “not happy” with this choice.

Markets have interpreted Iran’s decision to name Mojtaba Khamenei as Supreme Leader as a sign of additional escalation.

Oil prices pulled back from session highs and moved below the $100 level as G7 ministers said they were ready to release reserves to put pressure on prices. However, there is no exact plan. At this point, the market reacts to verbal interventions. In case G7 countries do not release reserves to cool prices in the near term, oil prices may gain additional upside momentum.

French President Emmanuel Macron has recently proposed a mission to escort ships through the Strait of Hormuz, but it is not clear whether it is a viable idea in the near term.

Currently, WTI oil is trying to settle back above the resistance level at $94.50 – $95.00. In case this attempt is successful, WTI oil will head towards the next resistance in the $98.50 – $99.00 range. RSI is in the extremely overbought territory, but traders will likely ignore this indicator as they focus on the physical deficit in the market.

Brent Oil Tested The $119 Level

Brent oil has also made an attempt to settle above the $120.00 level but lost momentum and pulled back below the $100.00 level. This major move has likely wiped out many leveraged positions.

President Trump has recently said that he had a plan to address high oil prices. However, he did not provide the details of the plan.

In case Brent oil settles below the support level at $97.00 – $97.50, it will head towards the next support at $91.50 – $92.00.

Traders should be prepared for fast moves in the upcoming trading sessions. The potential release of oil from strategic reserves and additional attacks on oil infrastructure in the region could serve as key catalysts for oil markets in the near term.

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