Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Retreats As Trump Arrives In China

Natural Gas Tested The $2.90 Level

Natural gas gains some ground as traders prepare for the EIA report, which will be released tomorrow. The report is expected to show that working gas in storage increased by +86 Bcf from the previous week.

From the technical point of view, natural gas managed to stay above the support level at $2.75 – $2.80. In case natural gas settles above the $2.90 level, it will head towards the resistance level at $3.00 – $3.05. A successful test of this level will push natural gas towards the $3.20 level.

On the support side, natural gas needs to settle below the $2.75 level to gain downside momentum. In this case, natural gas will head towards the $2.60 level.

WTI Oil Moves Lower As Traders Wait For Trump – Xi Meeting

WTI oil pulls back as traders focus on the upcoming meeting between U.S. President Trump and China’s Xi and react to the EIA Weekly Petroleum Status Report.

Trump has already landed in Beijing ahead of talks with Xi. The leaders are expected to discuss mutual trade and the situation in Iran. Analysts estimate that China buys about 90% of Iran’s oil exports.

The EIA report indicated that crude inventories declined by -4.3 million barrels from the previous week, compared to analyst forecast of -2.1 million barrels. At current levels, crude inventories are about 0.3% below the five-year average for this time of the year.

Total motor gasoline inventories decreased by -4.1 million barrels, while analysts expected that they would fall by -2.85 million. Distillate fuel inventories increased by +0.2 million barrels.

U.S. crude oil imports increased by +424,000 bpd, averaging 5.9 million bpd. Over the past four weeks, crude oil imports averaged 5.8 million bpd.

Strategic Petroleum Reserve declined from 392.7 million barrels to 384.1 million barrels as U.S. continued to sell oil from strategic reserves.

Domestic oil production increased from 13.573 million bpd to 13.71 million bpd. It should be noted that domestic oil production has finally managed to climb above the 13.6 million bpd level. Rising domestic oil production may put some pressure on oil prices.

WTI oil failed to settle above the resistance at $102.00 – $102.50 and is trying to settle back below the $101.00 level. In case this attempt is successful, WTI oil will head towards the psychologically important $100.00 level. A move below $100.00 will open the way to the test of the support level at $97.00 – $97.50.

Brent Oil Retreats Amid Profit-Taking

Brent oil is losing ground as traders take some profits off the table after the recent rally. Traders focus on Trump – Xi meeting and bet that U.S. will not restart the military operation against Iran.

The nearest support level for Brent oil is located in the $103.00 – $103.50 range. If Brent oil declines below the $103.00 level, it will move towards the next support at $97.00 – $97.50.

On the upside, a move above the $108.00 level will push Brent oil towards the resistance at $111.50 – $112.00. RSI is in the moderate territory, so there is plenty of room to gain additional momentum in case the right catalysts emerge.

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