Natural Gas Rallies As Traders Focus On EIA Data
November contract for natural gas rallied as traders reacted to the EIA report. The report indicated that working gas in storage increased by +53 Bcf from the previous week, in line with analyst estimates.
At current levels, stocks are -146 Bcf less than last year and +95 Bcf above the five-year average for this time of the year.
It looks that short-sellers were surprised by recent data on weather and storage, so they rushed to close their positions.
Currently, natural gas is trying to settle above the resistance level at $3.25 – $3.30. In case this attempt is successful, natural gas will move towards the next resistance level, which is located in the $3.55 – $3.60 range.
On the support side, a move below the $3.20 level will push natural gas towards the nearest support, which is located in the $3.00 – $3.05 range.
WTI Oil Tests New Highs As Houthis Fire Ballistic Missiles
WTI oil gained ground as Iran threatened to escalate attacks in case the country is attacked again. Iran’s President Pezeshkian said that the country was ready to negotiate but added that the Strait of Hormuz would remain blocked until U.S. lifted sanctions and the naval blockade.
According to recent reports, Saudi Arabia was attacked by Houthis. Saudi-led coalition forces said that they intercepted six ballistic missiles. Houthis are backed by Iran, and attacks on Saudi Arabia are a part of the plan to boost oil prices and put more pressure on the U.S.
From a big picture point of view, traders are worried that the Strait of Hormuz would remain de-facto blocked for months at a time when global oil reserves continue to decline.
I’d also note that escalation risks are increasing as U.S. sanctions put significant pressure on the Iranian economy. The latest round of sanctions on Iranian airlines forced many countries to refuse landing of Iranian planes. At some point, Iran may decide that it does not have the resources to tolerate the pain from sanctions, and may attack targets in the Middle East.
From the technical point of view, WTI oil attempts to settle above the resistance at $92.50 – $93.00. If WTI oil stays above this level, it will move towards the next resistance level at $97.00 – $97.50. A move above $97.50 will open the way to the test of the $100.00 level.
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See all Natural Gas forecastsBrent Oil Attempts To Settle Above $106.00
Brent oil tested new highs as traders focused on escalation risks in the Middle East and reduced bets on successful negotiations between U.S. and Iran.
In case Brent oil settles above the $106.00 level, it will move towards the resistance level at $109.00 – $109.50. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
On the support side, the nearest support level for Brent oil is located in the $101.50 – $102.00 range. A move below the $101.50 level will push Brent oil towards the support at $97.00 – $97.50.
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