Natural Gas and Oil Analysis: Market Braces for OPEC Meet

Key Insights

• Oil up 2% on Iraq’s OPEC+ support.
• Short-covering spurs Friday’s oil rally.
• U.S. rig count hints at output dip.
• Brent, WTI recover from lows.
• Natural Gas steadies at $3.130.
• WTI tests key $77.31 pivot.

Quick Fundamental Outlook

Oil prices climbed around 2% on Friday, buoyed by Iraq’s support for OPEC+’s production cuts and short-covering by traders ahead of the weekend. Despite the gains, oil recorded a 4% weekly loss, marking the third consecutive week of declines.

The rally was partly driven by traders addressing record short positions and was supported by confirmations from Saudi Arabia and Russia on continued output cuts. U.S. rig count reductions also hinted at future output decreases.

Both Brent and WTI slightly recovered from oversold conditions, though concerns over demand persist, particularly with weak Chinese data and reduced orders from its refiners.

Upcoming OPEC+ discussions on production levels are in focus, with the next meeting scheduled for November 26.

Natural Gas Price Forecast

In today’s technical outlook for Natural Gas (NG) Futures, the commodity is priced at $3.130, remaining relatively stable over the last 24 hours. The 4-hour chart timeframe offers a detailed view, revealing critical price thresholds. The immediate pivot point stands firm at $3.130, with ascending resistance levels at $3.234, $3.369, and a robust barrier at $3.497. Support levels to watch are $3.094 followed by $2.994 and $2.901, which could provide buying opportunities if tested.

The Relative Strength Index (RSI) is currently at 29, edging into the oversold territory, suggesting that the asset might be under significant selling pressure. This could potentially indicate an upcoming reversal if the market deems the asset undervalued. However, the 50-day Exponential Moving Average (EMA) at $3.272 sits above the current price, hinting at a potential bearish sentiment in the short term.

The technical pattern observed is a potential descending channel, suggesting that if the price fails to break above the upper boundary, we could see a continuation of the downward trend. However, a break above this pattern could invalidate the bearish outlook and indicate a shift in momentum.

In conclusion, the overall trend for Natural Gas Futures appears bearish, with short-term forecasts leaning towards a test of lower support levels, unless a reversal pattern is confirmed, which could lead to a retest of higher resistance levels in the upcoming sessions.

WTI Oil Price Forecast

In today’s commodities market, WTI crude oil (USOIL)  presents a technical tableau of cautious optimism. The asset is currently trading at $77.31, exhibiting minor negative movement within the last 24-hour cycle. The 4-hour chart indicates a market in contemplation, with key pivot points identified.

The immediate resistance is seen at $77.43, with subsequent ceilings at $79.02 and $81.22 potentially capping upward advances. On the descent, immediate support is marked at $75.35, with additional safety nets at $73.97 and $72.61.

The technical indicators offer a mixed sentiment. The RSI stands at 48.15, teetering just below the neutral 50 mark, suggesting a market that is neither overbought nor oversold, yet leaning towards bearish sentiment. The 50-day EMA at $79.02 is above the current price, reinforcing the resistance level and signaling a potential bearish trend in the short term.

Chart patterns and the recent price action within WTI Crude Oil indicate a testing of the lower bounds of a descending channel, with implications for future price direction dependent on whether it can find support or if it will breach lower, signaling a continuation of the bearish trend.

The overall trend skews neutral to bearish, with a close watch on whether the asset can muster the strength to challenge the immediate resistance at $77.43. The near-term forecast hinges on the asset’s interaction with established support levels, which if breached, could see further tests of the downside supports in the coming days.

Brent Oil Price Forecast

Brent Crude Oil’s latest trading session closes with the asset at $81.61, marking a slight decline from the previous close. The 4-hour chart timeframe provides a vantage point for key technical levels. Resistance is pegged at $81.72, with further hurdles at $83.47 and $85.28, while supports form at $79.28 and a more substantial floor at $77.58, with a critical juncture at $76.15.

The Relative Strength Index (RSI) reads at 48.29, hovering just below the neutral 50 threshold, indicating a lack of clear directional strength and suggesting a market in balance, but with a tilt towards bearish sentiment. The 50-day EMA at $83.13 offers a level of dynamic resistance, and the current price below this moving average may signal a bearish bias in the near term.

Overall, while the immediate trend for Brent Crude Oil appears bearish, the close proximity to significant technical levels suggests the potential for volatility and a test of the asset’s resilience at key resistance points in upcoming trading sessions.

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