Natural Gas and Oil Analysis: Market Dynamics and Price Movements

By:

Arslan Ali

Published: Dec 29, 2023, 14:24 GMT+00:00

Oil prices remain subdued under $74, with Saudi Arabia's price cut and a stronger US Dollar adding bearish pressure.

In this article:

Natural Gas

-3.98%

WTI Oil

-0.51%

Brent Oil

-0.89%

Key Insights

Oil prices face downward pressure from Saudi Arabia’s price reduction and a stronger US Dollar.
Natural Gas shows a slight decline, trading at $2.522, with an upward trend in the charts.
WTI and Brent Oil navigate key technical levels, hinting at potential market shifts.
Market closely monitors US jobless claims data and its impact on Oil prices.
Investors analyze economic data for insights into Natural Gas and Oil price trends.

Quick Fundamental Outlook

Oil prices remain subdued under $74, facing downward pressure after Saudi Arabia reduced its key oil price by $1.25 per barrel for February deliveries to Asia. This information, sourced from three independent Asian refiners, indicates a strategic pricing adjustment by Saudi Aramco.

Concurrently, a strengthened US Dollar on the last trading day of 2023 is exerting a bearish influence on dollar-denominated oil. The USD’s rebound is partly due to steady US jobless claims data, tempering expectations for aggressive interest rate cuts.

This has led traders to close their short USD positions, boosting demand for the Greenback. Currently, WTI Crude Oil is priced at $72 per barrel, while Brent Oil stands at $77 per barrel.

Natural Gas Price Forecast

Natural Gas Chart

Natural Gas (NG) is currently showing a modest decline, trading at $2.522, down by 0.36%. This movement in NG prices is being analyzed within a comprehensive framework of key technical levels and indicators. The pivot point for NG is set at $2.45, which is crucial for determining its short-term market direction.

The immediate resistance levels for NG are situated at $2.64, $2.80, and $2.99, marking the potential upper barriers for price movements. Conversely, support levels are established at $2.31, $2.20, and $2.06, offering key thresholds against any potential decline in prices.

Technically, the Relative Strength Index (RSI) for NG stands at 57, indicating a slightly bullish sentiment, but not strong enough to suggest overbought conditions.

The Moving Average Convergence Divergence (MACD) shows a value of 0.0049, which, although below its signal line at 0.0208, does not significantly undermine the positive outlook. Furthermore, NG is trading just above its 50-Day Exponential Moving Average (EMA) of $2.46, reinforcing a short-term bullish trend.

The presence of an upward channel in the chart pattern suggests that NG is likely to continue its current trajectory, barring any significant market developments.

WTI Oil Price Forecast

WTI Price Chart

USOIL, also known as West Texas Intermediate (WTI) crude oil, is exhibiting a slight downtrend, currently priced at $72.08, reflecting a marginal decrease of 0.05%. The oil market is currently navigating through significant technical levels, with the pivot point established at $72.38.

The immediate resistances are set at $73.69, $76.11, and $77.67, signifying potential upper limits for price movements. Conversely, support levels are found at $70.92, $69.07, and $67.70, offering crucial thresholds against downward price action.

The Relative Strength Index (RSI) for USOIL is at 35, indicating a bearish sentiment but not entering oversold territory. The Moving Average Convergence Divergence (MACD) stands at -0.31, marginally better than its signal line at -0.53, hinting at a possibility of upward movement. Importantly, USOIL is currently trading below its 50-Day Exponential Moving Average (EMA) of $73.42, suggesting a short-term bearish trend.

In summary, the technical outlook for USOIL seems cautiously optimistic above the $72 mark. This stance is reinforced by the recent breach of the upward channel and the formation of a Doji candlestick pattern, indicating potential for a reversal and a subsequent buying trend.

Brent Oil Price Forecast

UKOIL Price Chart

UKOIL, commonly known as Brent crude oil, has shown a slight increase in its trading value, currently at $77.64, marking a 0.12% rise. The oil market is closely observing key technical levels, with the pivot point set at $78.86.

Resistance levels are identified at $81.51, $83.06, and $84.64, indicating potential upward movement limits. Conversely, support levels are at $77.14, $74.40, and $72.45, offering a cushion for any downward trends.

The Relative Strength Index (RSI) for UKOIL is at 37, suggesting a bearish sentiment but not in oversold territory. The Moving Average Convergence Divergence (MACD) at -0.3000, slightly above its signal line at -0.4700, hints at potential upward momentum. Notably, UKOIL is trading just below its 50-Day Exponential Moving Average (EMA) of $74.05, indicating a short-term bearish trend.

In summary, the current market trend for UKOIL appears cautiously bullish above the $77.65 level, as indicated by the recent breach of the upward channel and the formation of a Doji candlestick pattern.

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About the Author

Arslan Aliauthor

Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.

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