Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Retreats From Session Highs As Traders Weigh Houthis’ Attack On Saudi Arabia

Natural Gas Moves Lower On Bearish Weather Forecasts

Natural gas pulled back as traders focused on high production and disappointing weather forecasts.

From the technical point of view, natural gas made several attempts to settle above the resistance level at $3.00 – $3.05 but lost momentum and pulled back towards the $2.90 level. In case natural gas settles below $2.90, it will head towards the nearest support, which is located in the $2.75 – $2.80 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

On the upside, natural gas needs to settle above $3.05 to have a chance to gain upside momentum in the near term. In this case, natural gas will move towards the resistance level at $3.25 – $3.00.

WTI Oil Moves Away From Session Highs

WTI oil pulled back from session highs as traders took some profits off the table despite worries about escalation in the Middle East.

Saudi Arabia said that operations at several facilities were halted by Houthi’s attacks. Houthis confirmed that they attakced Jazan refinery in Saudi Arabia.

I’d note that Houthis attacks are not related to the U.S. – Iran war. Saudi Arabia is trying to push Houthis out of Yemen’s capital Sana’a. In turn, Houthis try to put economic pressure on Saudi Arabia. While Houthis are backed by Iran, they have their own history of challenging relations with Saudi Arabia.

Traders decided to take some money off the table near multi-week highs, but it remains to be seen whether oil will be able to gain additional downside momentum in the near term.

The risks of escalation in the Middle East are rising on a daily basis. U.S. and Iran are not ready for a deal. Saudi Arabia is trying to get rid of Houthis, while militants attempt to put pressure on Saudi Arabia’s oil industry. Fundamentals remain bullish, and oil prices have a good chance to test new highs in the upcoming trading sessions.

Currently, WTI oil is trying to settle above the resistance level at $92.50 – $93.00. In case this attempt is successful, WTI oil will head towards the next resistance level at $97.50 – $98.00. RSI is in the moderate territory, so there is enough room to gain momentum in the near term.

On the support side, a move below the $91.00 level will open the way to the test of the support at $89.00 – $89.50.

Brent Oil Tested New Highs

Brent oil has also moved away from session highs as traders focused on profit-taking. That said, the upside trend stays strong, and Brent oil looks ready to test the psychologically important $100 level.

A move above $100 will push Brent oil towards the resistance at $101.50 – $102.00. I’ll view a move above $102.00 as a sign that Brent oil is ready for a strong rally.

On the support side, Brent oil needs to settle back below the $94.00 level to have a chance to gain downside momentum in the near term. In this case, Brent oil will move towards the next support level at $91.00 – $91.50.

If you’d like to know more about how commodity markets work, please visit our educational area.