Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Rebounds From Multi-Month Lows

Natural Gas Is Losing Some Ground After EIA Report

Natural gas remains stuck near the support level at $3.20 – $3.25 as traders react to the EIA Weekly Natural Gas Storage Report.

The report indicated that working gas in storage increased by +87 Bcf from the previous week, compared to analyst forecast of +81 Bcf.

At current levels, stocks are -23 Bcf less than last year and +175 Bcf above the five-year average for this time of the year.

From the technical point of view, natural gas stays range-bound as traders wait for stronger catalysts.

WTI Oil Moves Away From Recent Lows As U.S. Dollar Pulls Back

WTI oil rebounds from multi-month lows as traders take some profits off the table after the strong pullback.

According to recent reports, Saudi exports have already reached 90% of pre-war levels. Earlier, UAE raised its oil exports to pre-war levels. From a big picture point of view, the market prepares for a flood of oil going through the Strait of Hormuz.

The market is also focused on the future regime in the Strait of Hormuz. Interestingly, recent reports suggest that European countries believe that ships will have to pay fees to Iran and Oman for the passage through the world’s key oil route. U.S. has firmly opposed any potential fees in the Strait of Hormuz.

The disappointing Non Farm Payrolls report provided some support to oil markets in today’s trading session. U.S. dollar pulled back after the release of NFP report as forex traders reduced bets on hawkish Fed. Weaker dollar is bullish for oil and other dollar-denominated commodities as it makes them less expensive for buyers who have other currencies.

WTI oil failed to settle below the support at $66.50 – $67.00 and climbed above the $68.00 level. In case WTI oil stays above the $68.00 level, it will head towards the nearest resistance, which is located in the $70.50 – $71.00 range.

On the support side, a successful test of the support at $66.50 – $67.00 will open the way to the test of the next support level at $62.00 – $62.50.

Brent Oil Attempts To Settle Above The $72.00 Level

Brent oil has also moved higher as traders focused on U.S. dollar’s pullback and falling Treasury yields.

At this point, traders are not worried about potential problems in U.S. – Iran negotiations. Potential pain points include the regime in the Strait of Hormuz, Iran’s nuclear program, Israel – Hezbollah conflict, and Iran’s frozen assets. Many things could go wrong but traders remain calm and focus on rising traffic in the Strait of Hormuz.

If Brent oil manages to settle back above the support at $72.00 – $72.50, it will head towards the next resistance level at $77.00 – $77.50. RSI is in the oversold territory, so there is plenty of room to gain upside momentum in case the right catalysts emerge.

On the support side, Brent oil needs to stay below the $72.00 level to have a chance to gain downside momentum in the near term. In this case, Brent oil will head towards the next support level at $67.00 – $67.50.

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