Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Tests New Highs As UAE Stops Trade With Iran

Natural Gas Tests New Highs Ahead Of Tomorrow’s EIA Report

Natural gas gains ground as traders stay focused on weather forecasts, which indicate that demand will stay high in the upcoming days.

Natural gas moved above the resistance at $2.75 – $2.80 and made an attempt to settle above the $2.85 level. In case natural gas settles above $2.85, it will head towards the 50 MA at $2.98. A move above the 50 MA will push natural gas towards the resistance level at $3.00 – $3.05.

On the support side, a move below the $2.75 level will push natural gas back towards the $2.70 level. If natural gas settles below $2.70, it will head towards the $2.62 level.

WTI Oil Tests Resistance At $86.00 – $86.50

WTI oil tests new highs amid no signs of progress in the Middle East. U.S. attempts to put maximum economic pressure on Iran to force the country back to negotiations.

Yesterday, Iran attacked UAE by firing several missiles, which fell into the sea. UAE responded by stopping all trade and financial transactions with Iran. This move would deal a major blow to Iranian economy, which is dependent on transactions with UAE.

That said, the market does not believe that UAE’s decision would force Iran back to negotiations in the near term. Traders bet on additional escalation. Obviously, Iran cannot afford to wait until the country’s economy collapses under sanctions and naval blockade. Thus, Iran will likely try to escalate to raise costs for the global economy.

Today, traders also had a chance to take a look at the EIA Weekly Petroleum Status Report. The report indicated that crude inventories increased by +4.4 million barrels from the previous week, compared to analyst forecast of -0.6 million barrels.

Gasoline inventories grew by +0.7 million barrels, compared to analyst consensus of -1.2 million barrels. Distillate fuel inventories declined by -1.5 million barrels from the previous week.

Crude oil imports declined by -746,000 bpd, averaging 6.6 million bpd. Over the past four weeks, crude oil imports averaged about 6.5 million bpd.

Strategic Petroleum reserve declined from 298.7 million barrels to 293.4 million barrels as U.S. continued to sell oil from strategic reserves. Domestic oil production increased from 13.805 million bpd to 13.830 million bpd.

Currently, WTI oil is trying to settle above the resistance level at $86.00 – $86.50. If WTI oil manages to settle above the $86.50 level, it will head towards the next resistance level at $91.00 – $91.50. RSI is in the moderate territory, so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

Brent Oil Gains Ground Amid Rising Tensions In The Middle East

Brent oil tested new highs as traders focused on tensions in the Middle East and bet that U.S. and Iran will not get back to negotiations anytime soon.

A successful test of the resistance level at $91.00 – $91.50 will open the way to the test of the next resistance, which is located in the $95.50 – $96.00 range. A move above the $96.00 level will push Brent oil towards the $100.00 level.

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