Natural Gas Gains Ground As Traders Buy The Dip
Natural gas rebounds as traders stay focused on yesterday’s EIA report and increase their long positions after strong pullback.
Currently, natural gas is trying to settle back above the resistance level at $3.00 – $3.05. In case natural gas settles above the $3.05 level, it will move towards the resistance at $3.20 – $3.25.
On the support side, a move below the $3.00 level will push natural gas towards the 50 MA at $2.91. In case natural gas declines below the 50 MA, it will head towards the support level at $2.75 – $2.80.
WTI Oil Rebounds As Saudi Arabia Could Start An Operation Against The Houthis
WTI oil rebounds from session lows as traders focus on the release of diesel reserves and prepare for potential escalation in the Middle East.
French President Macron, who is the current chair of the G7, said that G7 would release 100 million barrels of oil and diesel stocks. Earlier, U.S. discussed the possibility to block diesel exports to Europe in case European countries did not release strategic reserves to put pressure on prices.
Oil markets pulled back as traders reacted to the G7 decision. However, oil prices have started to rise as traders focused on reports about Saudi Arabia’s plans.
According to recent reports, Saudi Arabia plans to attack Houthis to push them away from the Red Sea. Houthis are backed by Iran. The potential attack against the Houthis could lead to a direct conflict between Iran and Saudi Arabia. In such a conflict, Iran could target Saudi Arabia’s oil infrastructure.
Not surprisingly, traders rushed to buy oil as Saudi Arabia’s offensive against the Houthis could have a major impact on oil prices. At this point, it is not clear whether Saudi Arabia is ready for serious action as this scenario has major risks.
In addition to potential Iran’s involvement, Houthis themselves may deal a major blow to Saudi Arabia’s oil assets. For example, they could attack the East-West pipeline, which is used to bypass the Strait of Hormuz, or target Saudi Arabia’s refineries.
In case WTI oil settles above the $91.00 level, it will head towards the resistance level at $92.50 – $93.00. A successful test of this level will open the way to the test of the next resistance at $96.50 – $97.00. This resistance level has been tested several times in recent trading sessions and proved its strength.
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See all Gold forecastsBrent Oil Tests Resistance At $101.50 – $102.00
Brent oil is moving higher as traders worry that Saudi Arabia would attack the Houthis, starting a new round of escalation in the Middle East. At this point, Houthis’ control over the key Bab-El-Mandeb Strait has increased, creating major risks for Saudi Arabia. Forces of Yemen’s official government have suffered defeats and are not capable of stopping the Houthis.
Currently, Brent oil is trying to settle above the resistance at $101.50 – $102.00. If Brent oil climbs above the $102.00 level, it will move towards the next resistance level at $109.00 – $109.50.
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