Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Rallies Ahead Of U.S. – Iran Nuclear Talks

Natural Gas Traders Focus On Weather Forecasts

Natural gas settled below the $3.10 level as traders bet that demand will decline as weather gets warmer in the second half of February.

The recent EIA Weely Natural Gas Storage Report, which indicated that working gas in storage decreased by -249 Bcf from the previous week, did not provide support to the market. Traders ignored the report, which was rather bullish, and focused on weather forecasts and demand outlook.

In case natural gas manages to settle above the $3.10 level, it will move towards recent highs near the $3.30 level. A move above this level will push natural gas towards the resistance at $3.50 – $3.55. On the support side, a successful test of the support at $3.00 – $3.05 will open the way to the test of the next support level at $2.70 – $2.75.

WTI Oil Moves Higher Amid Rising Geopolitical Premium

WTI oil gains ground ahead of U.S. – Iran nuclear talks, which will be held in Geneva. It remains to be seen whether U.S. and Iran will be able to reach a deal.

The U.S. has put significant pressure on Iran, and traders do not rule out that U.S. may strike Iran in case negotiations fail.

Rising geopolitical premium provided material support to oil markets in today’s trading session. Traders have ignored stronger dollar, which moved higher in holiday-thinned trade.

Traders also monitor recent developments in the oil markets. India reduced purchases of Russian oil after the trade deal with the U.S., but China’s imports from Russia were on track to reach historic highs. At this point, there are no signs of deficit in the market. Russian oil is finding its buyers, although at heavy discounts.

WTI oil found support near the $62.50 level and climbed above the $63.50 level. In case WTI oil settles above $64.00, it will head towards the nearest resistance, which is located in the $65.50 – $66.00 range.

On the support side, a move below the $62.50 level will push WTI oil towards the support level at $60.00 – $60.50. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

Brent Oil Attempts To Settle Above $68.50

Brent oil is moving higher amid broad rally in the oil markets, which is driven by rising geopolitical premium.

Short covering may have also served as a positive catalyst for Brent oil today as bears did not want to hold their short positions ahead of the talks in Geneva.

Fundamentally, supply/demand outlook is bearish as supply is rising faster than demand. However, traders ignore fundamentals as military action against Iran may change the outlook.

According to recent reports, Iran’s military forces launched drills in the Strait of Hormuz. The potential closure of the Strait of Hormuz is a key bullish catalyst for oil markets. In this scenario, oil prices may soar as oil exports from the Middle East would be paralyzed.

It should be noted that Iran did not attempt to close the Strait of Hormuz during the conflict with Israel last summer and did not react to U.S. strikes against its military program.

In case Brent oil climbs above the $69.00 level, it will head towards the resistance at $69.50 – $70.00. A move above the $70.00 level will push Brent oil towards January highs near the $72.00 level.

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