Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Tests New Lows As Trump Hails Progress In Iran Talks

Natural Gas Moves Lower Ahead Of Tomorrow’s EIA Report

Natural gas pulled back despite hot weather. Traders are cautious ahead of the EIA report, which will be released tomorrow. The report is expected to show that working gas in storage increased by +81 Bcf from the previous week.

The technical picture remains unchanged as natural gas is stuck near the support level at $3.20 – $3.25. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

WTI Oil Retreats As Trump Highlights Progress In Iran Talks

WTI oil is losing ground as President Trump said that progress had been made in talks with Iran. Traders bet that U.S. and Iran will ultimately reach a deal.

Meanwhile, the flow of oil through the Strait of Hormuz is increasing. According to recent reports, the United Arab Emirates have already restored oil exports to pre-war levels. UAE has left OPEC, so the country’s oil exports will continue to increase.

Recent estimates suggest that oil flows through the Strait of Hormuz have already exceeded the 10 million bpd level.

Today, traders also focused on the EIA Weekly Petroleum Status Report. The report indicated that crude inventories declined by -3.8 million barrels from the previous week, compared to analyst forecast of -5.1 million barrels. At current levels, crude inventories are about 7% below the five-year average for this time of the year.

Total motor gasoline inventories declined by -2.3 million barrels, compared to analyst forecast of -0.95 million barrels. Distillate fuel inventories increased by +2.5 million barrels from the previous week.

U.S. crude oil imports declined by -291,000 bpd, averaging 5.3 million bpd. Over the past four weeks, crude oil imports averaged about 5.5 million bpd.

Strategic Petroleum Reserve declined from 331.2 million barrels to 325.7 million barrels as U.S. continued to sell oil from strategic reserves.

Domestic oil production decreased from 13.819 million bpd to 13.810 million bpd. From a big picture point of view, domestic oil production is stuck near the 13.8 million bpd level.

WTI oil settled below the previous support at $70.50 – $71.00 and is trying to settle below the $68.50 level. In case WTI oil settles below $68.50, it will head towards the next support at $62.00 – $62.50. RSI is in the oversold territory, but there is enough room to gain additional downside momentum in the near term.

Brent Oil Tests New Lows

Brent oil pulls back as traders focus on progress in U.S. – Iran negotiations and monitor rising oil flows through the Strait of Hormuz.

From the technical point of view, Brent oil continues its attempts to settle below the support at $72.00 – $73.00. In case Brent oil manages to stay below the $72.00 level, it will head towards the next support, which is located in the $67.00 – $67.50 range.

On the upside, Brent oil needs to climb back above $75.00 to have a chance to gain upside momentum in the near term. A move above the $75.00 level will push Brent oil towards the resistance at $77.00 – $77.50.

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