Natural Gas and Oil Analysis: Inventories, OPEC, & Production Key

Key Insights

• Warm US weather may cool off natural gas demand.
• High gas storage could level recent price hikes.
• LNG exports and record output stir market dynamics.
• OPEC+ cuts buoy oil, geopolitical ease weighs.
• NG at a pivot; $3.33 level key to trend direction.
• WTI struggles; bearish under $82.75 pivot.
• Brent’s cautious rise faces $87.24 resistance.

Quick Fundamental Outlook

The U.S. natural gas market faces a dichotomy as a warm weather forecast may reduce heating demand, which along with high storage levels, could temper recent price rises.

Conversely, LNG exports are robust, and production is at record highs, adding complexity to the demand equation. In the LNG sector, companies like Shell and TotalEnergies thrive on Asian demand, while BP’s Atlantic focus is challenged by full inventories.

Brent and WTI saw a slight uptick following OPEC+ production cuts by Saudi Arabia and Russia. However, with a potential surplus anticipated, and geopolitical tensions calming, prices recently dipped, influenced by active U.S. diplomatic efforts.

Natural Gas Price Forecast

Natural Gas retreated sharply in the last 24 hours, shedding 3.96% to trade at $3.392. The 4-hour chart reveals a testing phase near the pivot level of $3.34, with upside resistance seen at $3.63, $3.89, and a more robust ceiling at $4.25. Downside supports are carved out at $3.15, $2.90, and $2.63, delineating potential troughs for bearish descents.

The RSI is measured at 44, underlining a bearish sentiment but not deeply oversold, implying there could be room for further downside. The MACD corroborates this stance, displaying a slight bearish bias with the line below the signal. The current price is wavering around the 50 EMA of $3.37, signifying an indecisive market in the short term.

Chart analysis indicates a double bottom pattern at $3.336, typically a bullish reversal signal if confirmed. However, the overall bearish sentiment might challenge this potential upturn.

Natural Gas stands at a crossroads: bullish if it holds above the $3.33 support, suggesting a possible retest of higher resistance levels. Conversely, slipping below this critical juncture could see an acceleration of the bearish trend.

WTI Oil Price Forecast

US Oil exhibits a modest uptick in the recent 4-hour trading window, with the current price ascending 0.82% to $81.63. Key technical levels show a dynamic field of play; the pivot point at $82.75 hints at immediate resistance forming at $84.73, with successive challenges at $86.32 and $88.12. On the downside, support starts building at $80.27, trailed by $79.05 and $77.40.

The RSI indicator rests below the midline at 47, conveying a bearish sentiment in the current market atmosphere. Meanwhile, the MACD suggests a neutral to bearish trend without clear directional impetus. The 50 EMA stands slightly above the current price at $82.80, indicating a potential pivot for a short-term bearish bias. The chart patterns reveal a downward channel, corroborated by the resistance level at $82.75, emphasizing a bearish outlook unless breached.

Conclusively, the overall trend leans bearish with US Oil grappling below $82.75. In the short term, barring any significant bullish catalysts, the forecast anticipates US Oil to linger below the pivot, potentially challenging the immediate support levels.

Brent Oil Price Forecast

UK Oil nudged higher by 0.78% to $85.91, maintaining a cautious climb within the latest 4-hour trading cycle. A critical pivot point at $87.24 suggests forthcoming resistance with successive targets at $89.34, $91.25, and a more distant $93.65. Meanwhile, supports are stationed at $84.82, followed by $83.54 and $82.01, providing potential floors for price retracements.

The RSI lingers at 47, below the neutral 50 threshold, subtly hinting at a prevailing bearish sentiment among market participants. The MACD’s recent cross above its signal line offers a faint bullish signal, yet with a lingering bearish overtone due to the RSI’s stance. Notably, the price sits below the 50 EMA of $86.83, reinforcing the short-term bearish narrative.

Chart patterns exhibit a descending triangle, potentially applying downward pressure with a current trendline resistance at $87.24. The price’s position below this threshold, coupled with the technical indicators, aligns with a bearish outlook that could endure, pending a definitive upward break.

The overarching trend skews bearish, with UK Oil’s near-term direction seemingly capped below $86.83.

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