Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Soars 7% As Houthis Hit Saudi Tankers

Natural Gas Moves Higher As Storage Build Misses Estimates

Natural gas gains ground as traders react to the EIA Weekly Natural Gas Report. The report indicated that working gas in storage increased by +32 Bcf from the previous week, compared to analyst forecast of +35 Bcf. Lower-than-expected build provided support to natural gas markets.

The nearest resistance level for natural gas is located in the $3.00 – $3.05 range. A succcessful test of this level will push natural gas towards the 50 MA at $3.10. In case natural gas manages to settle above the 50 MA, it will head towards the resistance level at $3.25 – $3.30.

On the support side, a move below the $2.90 will open the way to the test of the nearest support at $2.75 – $2.80.

WTI Oil Soars As Houthis Enforce Blockade On Saudi Arabia

WTI oil rallied as Houthis attacked ships in the Red Sea. Earlier, Houthis announced that they imposed a maritime blockade on Saudi Arabia.

According to recent reports, two tankers were attacked. Houthis said they used missiles and drones to attack the vessels.

President Trump said that Iran was responsible for any further attacks by the Houthis. He added that Iran and Houthis would be punished.

Houthis’ involvement is a major development for oil markets. Previously, Saudi Arabia had a chance to redirect some of its exports from the Strait of Hormuz to Bab al-Mandab Strait by using the East-West pipeline, which is also known as Petroline. If Bab al-Mandab Strait gets closed by the Houthis, Saudi Arabia would be forced to use the Suez Canal. Ships going through Suez Canal would have to sail around Africa to supply oil to Asian customers.

Not surprisingly, oil prices skyrocketed as traders realized that supply situation may be worse than in March. In addition, global oil reserves have declined and have not been replenished.

Currently, WTI oil is trying to settle above the resistance level at $91.50 – $92.00. In case this attempt is successful, WTI oil will move towards the next resistance level, which is located in the $96.50 – $97.00 range. RSI has recently moved into overbought territory, but there is enough room to gain momentum in the near term.

Brent Oil Tests The $100.00 Level

Brent oil soared as traders prepared for major supply disruptions. Traders bet that U.S. will escalate attacks against Iran, while the latter could target oil facilities in the region.

From the technical point of view, Brent oil is trying to settle above the resistance level at $100.00 – $100.50. If Brent oil manages to settle above the $100.50 level, it will move towards the next resistance, which is located in the $100.50 – $101.00 range.

It remains to be seen whether traders are ready to start taking profits after the strong rally as oil supply outlook gets worse on a daily basis. In this environment, the market will stay focused on geopolitical developments.

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