Natural Gas, WTI Oil, Brent Oil Forecasts – WTI Oil Dives 6% On Hopes For Iran Peace Deal

Natural Gas Tests New Lows As Pullback Continues

Natural gas is losing ground as traders bet on de-escalation in the Middle East and react to disappointing weather forecasts. Demand is expected to stay low until Saturday, and may increase from Sunday.

The nearest support level for natural gas is located in the $2.50 – $2.55 range. if natural gas manages to settle below the $2.50 level, it will move towards the next support level, which is located in the $2.20 – $2.25 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

On the upside, natural gas needs to settle back above the $2.65 level to have a chance to gain sustainable upside momentum in the near term. A move above $2.65 will open the way to the test of the resistance level at $2.75 – $2.80.

WTI Oil Retreats As Traders Bet On Iran Peace Deal

WTI oil is under strong pressure as traders focus on developments in the Middle East. According to recent reports, U.S. and Iran may resume talks this week.

The ceasefire holds well despite U.S. blockade of Iranian ports. Iranian vessels did not attempt to get through the blockade as the country’s officials did not want to hurt the next round of negotiations.

The Strait of Hormuz is blocked by both Iran and U.S., so the situation in the physical oil market remains extremely tight. However, futures markets are forward-looking so traders ignore the realities of the physical market and focus on the potential peace deal between U.S. and Iran.

Meanwhile, Israel and Lebanon have finished their first round of talks. The sides called the talks “productive”. It should be noted that Hezbollah, which is Israel’s opponent in Lebanon, did not take part in talks. It remains to be seen whether official government of Lebanon has sufficient influence on Hezbollah. Perhaps, Hezbollah’s actions will depend on the outcome of peace talks between Iran and U.S.

Currently, WTI oil is trying to settle below the support level at $91.00 – $91.50. In case WTI oil manages to settle below the $91.00 level, it will move towards the next support, which is located in the $84.00 – $85.00 range.

On the upside, WTI oil needs to climb back above the resistance at $97.00 – $97.50 to gain upside momentum. A move above the $97.50 level will push WTI oil towards the psychologically important $100.00 level.

Brent Oil Tests The $95.00 Level

Brent oil is moving lower as traders bet that U.S. and Iran will reach a peace deal this week.

It should be noted that the spread between Brent oil and WTI oil increased as traders bet that the European market will remain undersupplied in the near term.

From the technical point of view, Brent oil failed to settle above the resistance at $97.00 – $97.50 and pulled back towards the $95.00 level. If Brent oil manages to settle below the $95.00 level, it will move towards the nearest support, which is located in the $91.00 – $91.50 range. A successful test of the support at $91.00 – $91.50 will open the way to the test of the 50 MA at $88.01.

If you’d like to know more about how commodity markets work, please visit our educational area.