Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Retreats As Traders Bet On Negotiations

Natural Gas Tests New Lows After EIA Report

Natural gas is losing round as traders react to the EIA Weekly Natural Gas Storage Report. The report indicated that working gas in storage increased by +41 Bcf from the previous week, compared to analyst consensus of +43 Bcf. The lower-than-expected storage build did not provide support to natural gas markets.

At current levels, stocks are -21 Bcf less than last year and +181 Bcf above the five-year average for this time of the year.

Currently, natural gas is trying to settle below the $2.85 level. In case this attempt is successful, natural gas will head towards the nearest support level, which is located in the $2.75 – $2.80 range. A successful test of the support at $2.75 – $2.80 will open the way to the test of the next support at $2.50 – $2.55.

WTI Oil Moves Lower Despite Fighting In The Middle East

WTI oil is losing ground as traders ignore mutual attacks in the Middle East and bet that U.S. and Iran will get back to negotiations.

Earlier, U.S. hit multiple targets in Iran. In turn, Iran responded by attacking U.S. bases in Jordan and Kuwait.

Iran said that the Strait of Hormuz would remain closed until U.S. accepted Iran’s control over the Strait. Reports indicate that U.S. military helped vessels get through the Strait of Hormuz amid U.S. – Iran fighting.

It should be noted that U.S. has already re-imposed naval blockade of Iranian ports. It remains to be seen whether blockade will force Iran to stop its attacks on vessels going through the Strait of Hormuz as hardliners are dominant in Iran’s politics.

From the technical point of view, WTI oil failed to settle above the resistance at $80.00 – $80.50 and is trying to settle below the $79.00 level. In case this attempt is successful, WTI oil will move towards the nearest support level, which is located in the $74.50 – $75.00 range.

On the upside, WTI oil needs to settle above the $80.50 level to have a chance to gain upside momentum in the near term. In this case, WTI oil will head towards the 50 MA at $84.66. A move above the 50 MA will open the way to the test of the resistance level at $86.00 – $86.50.

Brent Oil Tests The $84.00 Level

Brent oil moved lower amid broad pullback in the oil markets. Stronger dollar and worries about hawkish Fed put some pressure on oil markets in today’s trading session.

If Brent oil declines below the $84.00 level, it will head towards the support at $81.00 – $81.50. A move below the $81.00 level will push Brent oil towards the psychologically important $80.00 level.

On the upside, a successful test of the resistance at $86.00 – $86.50 will open the way to the test of the 50 MA at $88.64. In case Brent oil climbs above $88.64, it will head towards the resistance at $90.50 – $91.00.

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