Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Rises As Traders Ignore Efforts To Curb Prices

Natural Gas Tests Resistance At $3.25 – $3.30

Natural gas rallied as traders remained focused on the situation in the Middle East and reacted to the rebound in the European natural gas markets.

The Strait of Hormuz is de-facto closed, so a global LNG crisis is developing. There are no signs indicating that any side of the conflict is willing to negotiate in the near term.

Currently, natural gas is trying to settle above the resistance at $3.25 – $3.30. In case this attempt is successful, natural gas will move towards the next resistance level, which is located in the $3.55 – $3.60 range.

WTI Oil Gains Ground As Middle East War Rages On

WTI oil is moving higher as traders focused on the IEA efforts to curb oil prices. IEA members agreed to release 400 millon barrels of oil from strategic reserves.

Iran continued to attack its oil-producing neighbours to put more pressure on the global economy. The country added that it would attack all ports in the region in case its own ports are attacked.

Meanwhile, President Trump said that the U.S. could attack more targets in Iran if necessary. Put simply, the war rages on, and there is no end in sight. Thus, traders bet on a lengthy conflict that could last for weeks.

Today, traders also focused on the EIA Weekly Petroleum Status report. The report indicated that crude inventories increased by +3.8 million barrels from the previous week, compared to analyst forecast of +1.1 million barrels.

Total motor gasoline inventories declined by -3.7 million barrels, compared to anlayst consensus of -2.6 million barrels. Distillate fuel inventories declined by -1.3 million barrels from the previous week.

Strategic Petroleum Reserve remained unchanged at 415.4 million barrels. The dynamics of the Strategic Petroleum Reserve will be in focus in the upcoming weeks.

Domestic oil production decreased from 13.696 million bpd to 13.678 million bpd. Domestic oil production failed to settle above the 13.7 million bpd level despite rising oil prices.

From the technical point of view, WTI oil settled back above the support level at $84.00 – $84.50 and is trying to settle above the $87.00 level. If WTI oil stays above $87.00, it will head towards the nearest resistance level, which is located in the $90.00 – $90.50 range. A move above $90.50 will provide WTI oil with a chance to gain additional upside momentum.

Brent Oil Moves Higher As Iran Attacks Oil-Related Facilities In The Region

Brent oil gains ground as traders bet that the release of oil from strategic reserves will not put pressure on prices as the Strait of Hormuz remains shut.

Recent reports indicate that Iran wants international guarantees to end the war. At this point, neither U.S. nor Israel have shown a desire to finish the operation against Iran, so it is not clear why Iran believes it can determine when the war in the Middle East ends.

The market does not interpret Iran’s list of conditions as a sign that the conlict will come to an end. Instead, traders focus on recent attacks on oil-related facilities. Iran’s drones have recently hit fuel tanks at Oman port.

A successful test of the resistance at $91.50 – $92.00 will open the way to the test of the next resistance level, which is lcoated in the $97.50 – $98.00 range.

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