Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Rebounds As Strategic Petroleum Reserve Tests New Lows

Natural Gas Tests New Highs Ahead Of Tomorrow’s EIA Report

Natural gas rallies as traders focus on hotter trends in weather forecasts and prepare for tomorrow’s EIA report. The report is expected to show that working gas in storage increased by +19 Bcf from the previous week.

Natural gas climbed above the resistance at $2.75 – $2.80 and is moving towards the 50 MA at $2.94. In case natural gas settles above the 50 MA, it will head towards the next resistance, which is located in the $3.00 – $3.05. RSI is in the moderate territory, so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

WTI Oil Rebounds As Gasoline Inventories Fall By -2.5 Million Barrels

WTI oil gained ground as traders focused on geopolitical developments and reacted to the EIA Weekly Petroleum Status Report.

According to Iran’s Islamic Revolutionary Guard Corps, the country has reached a revenue-sharing deal with Oman on the Strait of Hormuz. It should be noted that a deal with Oman does not mean that the Strait of Hormuz would be fully reopened. U.S. has always been against any fees in the Strait of Hormuz.

The EIA report indicated that crude inventories increased by +0.1 million barrels, compared to analyst forecast of +0.6 million barrels. At current levels, crude inventories are 1% above the five-year average for this time of the year.

Total motor gasoline inventories declined by -2.5 million barrels, compared to analyst consensus of -0.7 million barrels. Distillate fuel inventories decreased by -2.2 million barrels from the previous week.

U.S. crude oil imports declined by -435,000 bpd from the previous week, averaging 6.2 million bpd. Over the past four weeks, crude oil imports averaged 6.6 million bpd.

Strategic Petroleum Reserve decreased from 293.4 million barrels to 289.7 million barrels. U.S. continues to sell oil from strategic reserves as the Strait of Hormuz is de-facto blocked. It should be noted that Strategic Petroleum Reserve has declined to levels that were last seen back in 1982.

Domestic oil production increased from 13.830 million bpd to 13.843 million, supported by high oil prices.

Currently, WTI oil is trying to settle back above the support level at $82.00 – $82.50. In case this attempt is successful, WTI oil will head towards the next resistance level, which is located in the $86.00 – $86.50 range.

Brent Oil Tests The $88.00 Level

Brent oil rebounds after yesterday’s sell-off as traders bet that U.S. will put pressure on Oman to eliminate the Hormuz deal between Oman and Iran. Global oil reserves continue to decline. It remains to be seen whether market will ignore the situation in case the Strait of Hormuz stays closed in the next few weeks.

If Brent oil manages to settle above the $88.00 level, it will head towards the resistance level at $91.00 – $91.50. A move above the $91.50 level will open the way to the test of the resistance at $95.50 – $96.00.

On the support side, a successful test of the support level at $86.00 – $86.50 will open the way to the test of the 50 MA at $83.80.

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