Natural Gas and Oil Forecast: Saudi Hikes Signal Robust Demand; Uptrend Ahead

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Updated: May 6, 2024, 13:41 GMT+00:00

Key Points:

Saudi crude price hike signals robust demand; geopolitical tensions impact oil markets.
Natural gas prices dip, hovering above pivotal $2.24 with potential for volatility.
Reduction in U.S. oil rigs points to tightening supply, influencing oil and gas forecasts.

Market Overview

Saudi Arabia’s decision to raise crude prices for June across the majority of regions had an impact on oil futures, signalling strong demand expectations for the summer. This adjustment coincided with ongoing geopolitical tensions in the Middle East, where the possibility of a Gaza ceasefire remains uncertain, potentially affecting the stability of a critical oil-producing area.

Last week, oil prices saw significant declines, with Brent crude dropping over 7%. This reflects the market’s reaction to weaker U.S. job data and anticipation of Federal Reserve policy adjustments. The reduction in the number of U.S. oil rigs also suggests a tightening supply, further impacting future oil and natural gas price forecasts.

Natural Gas Price Forecast

Natural Gas (NG) Price Chart

Today’s technical outlook for Natural Gas (NG) indicates a slight decline, with the commodity trading down by 0.72% at $2.2430. Positioned just above its pivot point at $2.24, NG’s price movement could suggest upcoming volatility.

Should it maintain above this pivot, potential resistance levels at $2.30, $2.34, and $2.40 may emerge, indicating upward pressure. Conversely, a fall below the pivot point could see NG testing support levels at $2.19, $2.15, and ultimately $2.10, which may stabilize declines. The 50-day and 200-day Exponential Moving Averages are at $2.07 and $1.98, respectively, reinforcing the pivotal role of the $2.24 mark in determining NG’s near-term trajectory.

WTI Oil Price Forecast

WTI Price Chart

USOIL‘s daily technical outlook indicates a slight upturn in its price, now trading at $78.37, reflecting a 0.55% increase. The pivotal point for USOIL stands at $79.24, delineating a potential shift in market sentiment.

Should prices surpass this pivot, immediate resistance levels at $79.86, $81.23, and $82.40 will come into play, challenging further advances. Conversely, support levels are set at $77.89, $77.07, and $76.33, which could halt declines and stabilize prices.

Technical indicators show the 50-day EMA at $79.76 and the 200-day EMA at $81.94, suggesting that maintaining above $79.24 could encourage a bullish trend, while falling below may signal increased selling pressure.

Brent Oil Price Forecast

Brent Price Chart

UKOIL market analysis shows a moderate increase, with the price up by 0.53% to $83.21. The technical chart reveals a pivot point at $83.42, which serves as the threshold for potential bullish or bearish trends. If UKOIL surpasses this point, it might run into difficulty moving upward at $84.44, $85.43, and $86.51.

Conversely, support is found at $82.72, with additional support at $81.94 and $81.08, which could provide a buffer against further price declines. The 50-day and 200-day Exponential Moving Averages are positioned at $84.50 and $86.61, respectively, indicating that staying above $83.42 may suggest a bullish trend, while a drop below could lead to increased selling pressure.

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About the Author

Arslan Aliauthor

Arslan, a webinar speaker and derivatives analyst, has an MBA in Finance and MPhil in Behavioral Finance. He guides financial analysis, trading, and cryptocurrency forecasting. Expert in trading psychology and sentiment.