Natural Gas, WTI Oil, Brent Oil Forecasts – WTI Oil Gains 6% As Middle East War Rages On

Natural Gas Rebounds As Traders Focus On The EIA Report

Natural gas gains ground as traders focus on disruptions in the European natural gas markets, which are caused by the war in the Middle East, and react to the EIA Weekly Natural Gas Storage Report.

The report indicated that working gas in storage decreased by -132 Bcf from the previous week, compared to analyst forecast of -121 Bcf. The larger-than-expected storage draw provided additional support to natural gas prices in today’s trading session.

At current levels, stocks are +115 Bcf higher than last year and -43 Bcf below the five-year average for this time of the year.

The nearest resistance level for natural gas is located in the $3.00 – $3.05 range. A move above the $3.05 level will push natural gas towards the next resistance at $3.25 – $3.30. RSI is in the moderate territory, and there is plenty of room to gain momentum in the near term.

WTI Oil Rallies As Iran Strikes Oil-Producing Countries

WTI oil gained strong upside momentum as traders remained focused on the war in the Middle East.

It looks that Iran’s defense strategy is to put pressure on its oil-producing neighbours in order to trigger a rally in the oil markets, which will hurt global economy.

Today, Iran launched missiles and drones against United Arab Emirates, Bahrain, and Qatar. The Strait of Hormuz, which is the world’s key oil route, remains de-facto closed.

Iranian Foreign Minister said that the country had not asked for a ceasefire and that it had no plans to start negotiations with U.S. and Israel.

President Trump reported progress in military operation against Iran, but today’s action showed that Iran maintained capability to strike multiple targets in the Middle East.

Traders have already started to price in the possibility of a weeks-long conflict in the Middle East. In case there is no quick solution, Middle East producers may be forced to shut down fields due to lack of storage.

Kuwait has already cut oil processing at the refineries as it had no way to export via the Strait of Hormuz. President Trump said that the Strait of Hormuz would be open but did not provide a timeline.

Oil traders do not believe that the U.S. will be able to ensure safe passage through the Strait of Hormuz in the near term, which is bullish for oil markets.

WTI oil moved above the resistance at $77.50 – $78.00 and is trying to settle above the $80.00 level. In case this attempt is successful, WTI oil will move towards the next resistance level at $84.00 – $84.50.

Brent Oil Rallies As Traders Bet On A Long War In The Middle East

Brent oil tests new highs as traders bet that conflict in the Middle East would lead to serious disruptions in the oil market.

Currently, Brent oil is trying to settle above the resistance level at $83.50 – $84.00. If Brent oil stays above $84.00, it will move towards the next resistance at $87.50 – $88.00.

It should be noted that RSI is in the extremely overbought territory, so the risks of a pullback are increasing. However, technicals may take a back seat as traders focus on geopolitical developments.

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