Natural Gas Tests The 50 MA At $2.88
Natural gas pulled back as traders took some profits off the table after the recent rally and prepared for the EIA report, which will be released tomorrow.
In case natural gas settles below the 50 MA at $2.88, it will move towards the nearest support, which is located in the $2.75 – $2.80 range. A successful test of the support at $2.75 – $2.80 will open the way to the test of the next support level at $2.60 – $2.65.
WTI Oil Moves Lower As Traders Bet That Saudi Arabia Would Restart Key Pipeline
WTI oil is losing ground as traders focus on the news from Saudi Arabia. According to recent reports, the country plans to restart about half of the capacity of the damaged East-West pipeline in the next few days. The pipeline was halted after drone attacks. The reports also indicated that Saudi Arabia planned to get the pipeline back to full capacity in six weeks.
The market views the news as a negative catalyst for prices, although it is clear that global deficit will increase until the pipeline gets back to full capacity. In addition, the risk of another attack is significant. It is believed that the previous attack was performed by pro-Iran militia in Iraq. Meanwhile, the country also faces attacks from Houthis, who are also backed by Iran.
Oil prices may also react to the Fed Interest Rate Decision, which has been released today. The Fed decided to raise the federal funds rate by 25 bps, in line with market’s expectations. U.S. dollar moved higher against a broad basket of currencies after the release, which could put additional pressure on commodities in the near term.
Currently, WTI oil is trying to settle back below the $102.00 level. In case this attempt is successful, it will head towards the psychologically important $100.00 level. A move below $100 will open the way to the test of the next support, which is located in the $97.50 – $98.00 range.
On the upside, WTI oil needs to climb above the $103.00 level to have a chance to gain upside momentum in the near term. In this case, WTI oil will head towards recent highs near $106.50. RSI has recently moved back into moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
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See all Natural Gas forecastsBrent Oil Attempts To Settle Below $105.00
Brent oil is losing ground as traders focus on recent developments in Saudi Arabia and react to Fed decision.
EIA Weekly Petroleum Status Report showed that U.S. Strategic Petroleum Reserve declined from 285.4 million barrels to 285.0 million barrels as U.S. continued to sell oil from reserves. Falling reserves will continue to serve as a bullish catalyst for oil markets until the Strait of Hormuz is reopened.
If Brent oil settles below the $105.00 level, it will head towards the support level at $101.50 – $102.00. A successful test of this level will push Brent oil towards the psychologically important $100.00 level.
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