Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Soars 7% As Iran Attacks U.S. Forces In Jordan

Natural Gas Gains Ground As Traders Buy The Dip

Natural gas rebounds as traders switch to September contract and focus on rising tensions in the Middle East.

The nearest resistance level for natural gas is located in the $2.75 – 2.80 range. In case natural gas climbs above the $2.80 level, it will gain additional upside momentum and move towards the next resistance at $3.00 – $3.05.

On the support side, a move below the $2.80 level will push natural gas towards the support level at $2.50 – $2.55.

WTI Oil Rallies As President Trump Promises To Hit Iran Hard

WTI oil soared as Iran attacked U.S. forces in Jordan. Iran claimed that the attack was a response to “aggressive U.S. actions”. Iran did not provide further details.

U.S. and Saudi Arabia delivered strikes in Iraq after drones launched by Iraqi groups made an attempt to strike oil facilities in Saudi Arabia. Some groups in Iran are controlled by Iran rather than Iraq’s official government.

President Trump said that U.S. will be “hitting them hard” in response to Iran’s attack. Not surprisingly, traders rushed to buy oil. The pause in military action between U.S. and Iran lasted just four days.

According to recent reports, Iran declined Oman’s proposal over the Strait of Hormuz. Oman proposed mutual control, while Iran wanted to have a decisive role in the management of the world’s key oil supply route.

Iran cannot find consensus on the Strait of Hormuz with Oman, a country which is not openly hostile to Iran. The inability to reach a deal with a reasonably friendly country highlights the risks for navigation in the Strait of Hormuz in the near term.

Iran is not ready for a deal, while the U.S. did not manage to put enough pressure on Iran to make the country reopen the Strait of Hormuz. None of the sides of the conflict has a decisive advantage, which means that the Strait of Hormuz could be closed for weeks.

A successful test of the resistance at $85.50 – $86.00 will push WTI oil towards the next resistance level, which is located in the $90.50 – $91.00 range.

Brent Oil Tests Resistance At $90.50 – $91.00

Brent oil rallied as traders focused on geopolitical developments and reacted to the EIA report from the U.S.

The report indicated that crude inventories declined by -7.2 million barrels from the previous week, compared to analyst forecast of -1.3 million barrels. At current levels, crude inventories are about 7% below the five-year average for this time of the year. Gasoline inventories were mostly unchanged, compared to analyst consensus of -0.7 million barrels.

Strategic Petroleum Reserve decreased from 311.4 million barrels to 307.7 million barrels as U.S. continued to sell oil from strategic reserves. Strategic Petroleum Reserve declined to multi-decade lows, which was a longer-term bullish catalyst for oil markets.

If Brent oil manages to settle above the resistance level at $90.50 – $91.00, it will move towards the next resistance, which is located in the $95.50 – $96.00 range.

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