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Natural Gas and Oil Analysis: Market Reacts to Geopolitical Tensions and OPEC Dynamics
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Oil prices navigate a complex landscape with geopolitical tensions and OPEC's cohesion at stake, impacting commodities like USOIL, UKOIL, and Natural Gas.
Key Insights
- Oil prices see second weekly gain despite Red Sea vessel attacks and Angola’s OPEC exit.
- Natural Gas shows cautious optimism, with NG slightly above pivot point at $2.44.
- USOIL faces bearish sentiment below pivot point at $74.96.
- UKOIL trends bearish below $80 amid market volatility.
- Weaker U.S. dollar and cooling inflation support oil prices.
Quick Fundamental Outlook
Natural Gas Price Forecast
On December 25, Natural Gas (NG) presents a cautiously optimistic scenario in the commodities market, showing a modest increase of 0.30% to $2.489. This recent uptick places NG slightly above its pivot point at $2.44, indicating a potential shift towards bullish sentiment.
Immediate resistance levels are set at $2.58, $2.71, and $2.85, which could pose challenges for further upward movement. Conversely, NG finds support at $2.31, followed by lower levels at $2.20 and $2.06, crucial for stabilizing any downward trends.
Technical indicators provide a mixed yet hopeful outlook. The Relative Strength Index (RSI) at 56 suggests a leaning towards bullish sentiment, while the Moving Average Convergence Divergence (MACD) at 0.009 against a signal of 0.021 underscores a potential for upward momentum.
A noteworthy chart pattern is a downward trendline breakout at the $2.45 mark, further supporting the potential for a buying trend. The overall trend for NG appears bullish above the $2.45 level, pointing towards a possible testing of higher resistance levels in the short term.
WTI Oil Price Forecast
On December 25, USOIL exhibits a cautious market stance, marked by a 0.70% decline to $73.39. This movement situates USOIL below its pivotal point of $74.96, suggesting a bearish undertone. The oil market, characterized by its sensitivity to global economic cues, faces immediate resistance at $76.44, with further barriers at $78.07 and $80.11.
These levels are critical in determining USOIL’s potential upward trajectory. Support levels are established at $72.32, $70.41, and $68.00, providing a safety net against further price drops.
The Relative Strength Index (RSI) at 48 and the Moving Average Convergence Divergence (MACD) at -0.13, compared to a signal of 0.38, point to a bearish sentiment. The price’s position relative to the 50-Day Exponential Moving Average (EMA) of $73.03 further reinforces this bearish trend.
A noticeable downward trendline extending resistance at $75 adds to the market’s cautious outlook. The short-term forecast for USOIL remains bearish, particularly if it stays below the $75 mark.
Brent Oil Price Forecast
On December 25, UKOIL navigates a complex market terrain, reflecting a slight decline of 0.60%, positioning it at $78.87. The oil market, known for its volatility, currently hovers around a pivot point of $80.07, with crucial resistance levels looming at $83.06, $84.85, and $87.05.
These points mark significant barriers, potentially dictating the direction of future price movements. Conversely, immediate support is found at $77.53, followed by stronger levels at $75.24 and $72.44, which could provide a much-needed buffer against further price drops.
Technical indicators suggest a balanced yet cautious market sentiment. The Relative Strength Index (RSI) stands at 50, indicating a market equally weighted between bullish and bearish trends.
The Moving Average Convergence Divergence (MACD) at -0.150 against a signal of 0.470 hints at potential downward momentum. Moreover, the price’s proximity to the 50-Day Exponential Moving Average (EMA) of $78.21 adds to this cautious outlook.
A downward trendline extending resistance at $80 underscores the potential challenges facing the market. The overall trend for UKOIL is bearish below $80, indicating that a sustained drop below this level could lead to further declines.
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.
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