Natural Gas Rebounds As Traders Buy The Dip
Natural gas rebounds as traders react to the EIA Weekly Natural Gas Storage Report. The report indicated that working gas in storage increased by +77 Bcf from the previous week, compared to analyst forecast of +79 Bcf. Lower-than-expected build provided some support to natural gas markets.
At current levels, stocks are -152 Bcf less than last year and +35 Bcf above the five-year average for this time of the year.
The nearest resistance level for natural gas is located in the $2.85 – $2.88 range. In case natural gas manages to settle above the $2.88 level, it will head towards the next resistance at $3.00 – $3.03.
On the support side, a move below the $2.70 level will push natural gas towards the $2.55 level.
WTI Oil Gains Ground As Traders Focus On Rising Tensions In The Middle East
WTI oil is moving higher as traders worry that U.S. will restart the military operation against Iran. The U.S. ordered some diplomats and their families to leave Saudi Arabia amid attacks from the Houthis. However, diplomats are often leaving ahead of potential military action, so it remains to be seen whether Houthis’ actions were the key reason for the decision.
According to recent reports, the U.S. and Israel were thinking about a new operation against Iran, which has increased attacks on tankers going through the Strait of Hormuz. Iran has previously said that it would employ new strategy if attacked. According to Iranian officials, the country could attack data centers, cut internet cables and even start a land operation against any country that helps the U.S. or Israel.
Put simply, the risks of a major escalation in the Middle East are rising. Any attempts to calm markets by releasing reserve stockpiles will not work in case of a new war in the region.
The nearest resistance level for WTI oil is located in the $100.50 – $101.00 range. If WTI oil manages to settle above the $101.00 level, it will head towards the next resistance, which is located in the $106.00 – $106.50 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
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See all Natural Gas forecastsBrent Oil Tests The $113.00 Level
Brent oil rallied as traders focused on recent developments in Saudi Arabia. The market has started to price in risks of a new military operation against Iran.
From the technical point of view, Brent oil climbed above the resistance level at $109.00 – $109.50 and is trying to settle above the $113.00 level. In case this attempt is successful, Brent oil will head towards the next resistance level, whcih is located in the $114.50 – $115.00 range.
If Brent oil climbs above the $115.00 level, it will head towards April highs near the $120.00 level. A move above $120.00 will indicate that the situation in the oil markets is out of control. I’d expect that demand destruction could ultimately put some pressure on prices after a potential spike above the $120.00 level.
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