Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Rallies As Trump Threatens To Strike Iran Again

Natural Gas Remains Stuck Near $3.25

Natural gas pulled back after an unsuccessful attempt to settle above the $3.35 level. The market remains range-bound amid lack of strong catalysts.

The technical picture has not changed in recent days as natural gas prices are moving back and forth near the support level at $3.20 – $3.25.

WTI Oil Tests New Highs As Geopolitical Risks Rise

WTI oil rallied as traders focused on escalation in the Middle East. President Trump said that the U.S. could launch additional strikes against Iran. He added that the U.S. may also resume the naval blockade of Iranian ports.

Earlier, the U.S. revoked a sanctions waiver which allowed Iran to sell its oil in the global markets. This move was made in response to Iran’s attacks on vessels in the Strait of Hormuz.

It should be noted that Trump has also threatened to bomb infrastructure targets in Iran, including power and desalination plants. Iran has already threatened to retaliate in case its power plants are bombed. Such a move would mark a major escalation in the region and could lead to unpredictable consequences. That said, Trump has also threatened to bomb Iran’s power plants in the first phase of the conflict but did not do it.

Today, traders also had a chance to take a look at the Weekly Petroleum Status Report. The report indicated that crude inventories increased by +3 million barrels from the previous week, compared to analyst forecast of -2.4 million barrels. At current levels, crude inventories are about 6% below the five-year average for this time of the year.

Total motor gasoline inventories declined by -1.9 million barrels, compared to analyst consensus of -1.6 million barrels. Distillate fuel inventories decreased by -5 million barrels from the previous week.

Crude oil imports increased by 351,000 bpd, averaging 5.6 million bpd. Over the past four weeks, crude oil imports averaged 5.4 million bpd.

Strategic Petroleum Reserve declined from 325.7 million barrels to 319.5 million barrels as U.S. continued to sell oil from strategic reserves.

Domestic oil production increased from 13.81 million bpd to 13.86 bpd as producers continued to boost production.

Currently, WTI oil is trying to settle above the resistance level at $74.50 – $75.00. In case this attempt is successful, WTI oil will head towards the next resistance level at $78.00 – $78.50.

Brent Oil Tests The $80.00 Level

Brent oil rallied as traders focused on rising geopolitical risks. In case the Strait of Hormuz gets closed again, Brent oil will gain additional upside momentum. It should be noted that global oil reserves have declined significantly during the crisis in the Strait of Hormuz, so additional problems may put significant pressure on global economy.

In case Brent oil manages to settle above the resistance level at $77.00 – $77.50, it will head towards the resistance level at $81.00 – $81.50. On the support side, a move below the $76.00 level will push Brent oil towards the support at $72.00 – $72.50.

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