Natural Gas and Oil Forecast: WTI and Brent Rise, Await $80 and $85 Barriers

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Updated: May 10, 2024, 11:06 GMT+00:00

Key Points:

China's robust import data fuels optimism for sustained oil demand, supporting a 2% weekly gain.
U.S. crude inventories drop, signaling strong oil usage amidst rising travel demand.
Ongoing Gaza conflict adds a risk premium to oil, impacting global supply concerns.

Natural Gas and Oil Forecast: WTI and Brent Rise, Await $80 and $85 Barriers

Market Overview

Oil prices are set to conclude the week with a 2% gain, bolstered by encouraging signs from China and a softening dollar, despite geopolitical tensions. China’s robust import data suggests stable domestic demand, maintaining steady oil consumption expectations.

In the U.S., a drop in crude inventories coupled with a rise in travel demand signals strong oil usage, even as gasoline and diesel demands remain subdued since the 2020 pandemic. The possibility of the U.S. Federal Reserve cutting interest rates due to a cooling labor market further supported oil prices.

However, ongoing military actions in Gaza by Israel and the uncertain ceasefire with Hamas add a risk premium to oil prices, hinting at potential supply disruptions from the Middle East.

Natural Gas Price Forecast

Natural Gas (NG) Price Chart

Natural Gas (NG) sees the commodity trading at $2.33 per MMBtu, marking a 0.91% increase. Positioned at a pivot point of $2.31, NG faces immediate resistance levels at $2.35, $2.39, and $2.43. These barriers could restrict further upward movement.

Conversely, support is established at $2.28, with additional safety at $2.24 and $2.20. The technical indicators show the 50-day Exponential Moving Average (EMA) at $2.20, providing a foundational support level, while the 200-day EMA is at $2.02, reflecting longer-term trends.

Should prices fall below the pivot of $2.31, a potential sharp selling trend could be triggered, emphasizing a critical juncture for NG in the near term.

WTI Oil Price Forecast

WTI Price Chart

Today’s technical outlook for USOIL shows a slight gain, with the price at $79.79, marking a 0.30% increase. The pivot point, critical for determining the market’s direction, is set at $78.92. Above this, resistance levels are established at $80.71, $81.53, and $82.30, each posing potential challenges to upward movement.

On the downside, immediate support lies at $77.91, with further support at $77.18 and $76.16, which could act as cushions against price drops. The 50-day Exponential Moving Average (EMA) stands at $79.09, indicating near-term support, while the 200-day EMA at $80.75 could resist upward trends. A decisive fall below the pivot could intensify selling, suggesting a bearish phase for USOIL.

Brent Oil Price Forecast

Brent Price Chart

UKOIL reveals a modest increase, with the price rising by 0.27% to $84.36. The market’s pivot point is currently set at $84.09. Resistance levels are identified at $84.80, $85.57, and $86.54, suggesting potential challenges for further price ascents.

Conversely, support levels are found at $83.39, $82.79, and $82.04, which could provide fallback positions if prices decline. The 50-day Exponential Moving Average (EMA) at $83.74 offers near-term support, whereas the 200-day EMA at $85.49 may act as resistance.

A move below the pivot point of $84.09 could trigger a downward trend, emphasizing a cautious approach in the current market environment.

For a look at all of today’s economic events, check out our economic calendar.

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.