Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Soars 9% As Trump Restarts Naval Blockade Of Iran

Natural Gas Tests New Lows

Natural gas is losing ground as weather forecast updates did not provide any support. Demand is expected to stay high in the next seven days, but traders remain focused on the recent EIA report, which showed that stocks are building faster than expected.

From the technical point of view, natural gas settled below the previous support at $3.00 – $3.05 and continues its attempts to settle below the $2.90 level. In case natural gas manages to settle below $2.90, it will head towards the next support level at $2.75 – $2.80.

WTI Oil Soars As Traders Focus On Middle East Tensions

WTI oil rallied as traders reacted to rising tensions in the Middle East. President Trump announced that U.S. will impose a naval blockade on Iranian ports.

He also demanded a 20% fee on all cargo going through the Strait of Hormuz, saying that the U.S. would become a “guardian” of the Strait. It is not clear what Gulf countries think about Trump’s initiative.

Most likely, they are shocked by the size of the potential fee. Reports indicated that Iran charged up to 2% for safe passage through the Strait, while Trump’s fee is 10 times higher. At the time of writing, the U.S. did not provide any details about the plan to charge fees of 20% in the Strait of Hormuz.

Not surprisingly, traders expect that the situation in the Strait of Hormuz will continue to escalate. Iran would likely attack vessels that are using the non-approved route.

In addition, Houthis have started to attack Saudi Arabia. Houthis are Iran’s allies who claim that they have been attacked. According to Houthis, their attacks on Saudi Arabia were triggered by attacks against them.

It should be noted that the world’s oil reserves have been significantly depleted by the previous blockade of the Strait of Hormuz. Another blockade could serve as a serious bullish catalyst for oil prices and quickly push them towards levels that were seen in April and May.

Currently, WTI oil is trying to settle above the resistance at $74.50 – $75.00. In case this attempt is successful, WTI oil will move towards the next resistance level, which is located in the $80.00 – $80.50 range. RSI is in the moderate territory, so there is plenty of room to gain upside momentum in the near term.

Brent Oil Tests The $83.00 Level

Brent oil soared as traders worried that the flows of oil through the Strait of Hormuz would fall to zero. Geopolitical news will remain the key driver for oil markets in the near term.

From the technical point of view, Brent oil attempts to settle above the resistance at $81.00 – $81.50. In case this attempt is successful, Brent oil will move towards the next resistance level, which is located in the $86.00 – $86.50 range.

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