Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Retreats While Traders Wait For Iran’s Comments

Natural Gas Attempts To Settle Below $2.75

Natural gas pulls back as traders react to the recent EIA report and focus on weather forecasts. From a big picture point of view, the market does not have strong bullish catalysts.

Natural gas made an attempt to settle above the resistance at $2.75 – $2.80 but lost momentum and pulled back towards the $2.75 level. In case natural gas declines below the $2.75 level, it will head towards yesterday’s lows near $2.68. A move below $2.68 will open the way to the test of the $2.60 level.

WTI Oil Retreats Amid Geopolitical Uncertainty

WTI oil pulls back as traders continue to wait for Iran’s response to the U.S. proposal to end the war in the Middle East.

On Wednesday, the U.S. sent its plan to Iran, proposing to reopen the Strait of Hormuz.  The U.S. noted that it was ready to lift the blockade on Iranian ports in case the Strait was reopened. Iran has not indicated whether it would release its response this week.

Meanwhile, two Iranian oil tankers made an attempt to break the blockade. U.S. forces delivered strikes against these tankers. According to Iran, this action violated the ceasefire agreement. It should be noted that Iran has once again attacked the United Arab Emirates, firing three drones and two ballistic missiles. U.S. believes that the ceasefire remains in place despite mutual attacks.

Earlier, President Trump threatened that U.S. will restart the military operation against Iran in case the country did not agree to a deal. Oil prices are moving lower as traders do not believe that U.S. will restart the operation. Rising oil prices have already put significant pressure on global economy, so traders bet that the sides of the conflict will be forced to reach a deal.

That said, the market remains cautious as the developments in the Middle East are often unpredictable.

Currently, WTI oil continues its attempts to settle below the 50 MA at $94.45. If WTI oil manages to settle below this level, it will move towards the support level, which is located in the $91.00 – $92.00 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in the near term.

Brent Oil Tests The $100 Level

Brent oil is moving lower as traders reduce their long positions ahead of the weekend. Today’s Michigan Consumer Confidence report showed that U.S. consumers feel the pressure from rising gasoline prices. Traders bet that President Trump will not escalate the situation in the Middle East as the potential escalation could lead to record oil prices.

In case Brent oil settles below the 50 MA at $100.66, it will head towards the support level at $97.00 – $97.50. A move below the $97.00 level will signal that Brent oil is ready to gain additional downside momentum.

On the upside, a successful test of the resistance at $103.00 – $103.50 will open the way to the test of the next resistance level at $111.50 – $112.00. Most likely, Brent oil will need significant positive catalysts to gain upside momentum in the near term.

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