Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Rallies 5% As Traders Bet On A Long War In The Middle East

Natural Gas Moves Higher As Traders Focus On Strong LNG Demand

Natural gas gains ground as traders switch from April contract to May contract. Traders also stay focused on the recent EIA report, which showed a bigger-than-expected inventory draw.

Rising tensions in the Middle East provide additional support to natural gas markets as traders bet that LNG demand will stay extremely strong in the upcoming months. There are no signs of de-escalation in the war in the Middle East.

From the technical point of view, natural gas attempts to settle above the resistance at $3.00 – $3.05. In case this attempt is successful, natural gas will head towards the resistance level, which is located in the $3.25 – $3.30 range. On the support side, a move below the 50 MA at $2.88 will push natural gas towards the support at $2.75 – $2.80.

WTI Oil Soars Amid Rising Tensions In The Middle East

WTI oil rallied as traders focused on escalation in the Middle East. According to Iran, Israel hit two of the country’s largest steel factories, a power plant, and nuclear sites. Iran promised to “exact heavy price” on its enemies.

Traders expect that Iran will attack steel assets in the region. There’s always a possibility of additional attacks on oil and gas infrastructure, which is bullish for oil markets.

U.S. Secretary of State Marco Rubio noted that the war in Iran will take “weeks not months”, but traders are not sure whether any participant of the war has full control over its timing.

Conflicts are often self-perpetuating and may continue even if opponents are willing to negotiate a deal. At this point, there are few signs indicating that U.S. or Iran are ready for a deal.

The Strait of Hormuz remains de-facto closed, and Iran maintains control of passage through the world’s key oil route. It should be noted that there were no serious attempts to unblock the Strait of Hormuz, which is not surprising due to extreme risks of such an operation.

It looks that oil traders do not agree with Marco Rubio and prepare for months of war in the Middle East. Such a scenario will deal a major blow to the global economy.

Currently, WTI oil is trying to settle above the resistance at $97.00 – $97.50. If WTI oil stays above this level, it will get to the test of the $100.00 level. A move above $100.00 will open the way to the test of the resistance level at $102.00 – $102.50.

Brent Oil Tests New Highs As Rally Continues

Brent oil rallied as traders bet on additional escalation in the Middle East. Traders are waiting for a potential ground operation in Iran, which could have a major impact on oil prices.

Brent oil climbed above the resistance level at $108.50 – $109.00 and gained strong upside momentum. Currently, Brent oil attempts to settle above the $112.00 level. If Brent oil manages to settle above $112.00, it will head towards the next resistance level, which is located at multi-year highs at $118.50 – $119.00.

RSI is close to the overbought territory, but there is plenty of room to gain momentum in the near term. Traders should note that technical factors often take a back seat when physical flows of oil are disturbed.

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