Natural Gas and Oil Analysis: Mideast Tensions Stir Market

Key Insights

• Resource conflicts spike market volatility, notably in Ukraine and Middle East.
• Europe’s energy dependency on Russia magnifies market impacts.
• Middle East tensions rise; US aims to prevent wider conflict.
• Iran-Israel conflict likely to remain a proxy war.
• Natural Gas prices dip, but bullish trend suggested above $3.44 pivot.
• WTI Crude faces bearish pressure, pivotal at $85.13.

Quick Fundamental Outlook

Global conflicts, particularly over resources, have escalated market volatility, as seen in Ukraine, Israel, and US-China tensions. Europe’s reliance on Russian energy, highlighted by the Russia-Ukraine war, has broader implications for energy markets. Despite a stagnant conflict, a potential ceasefire in Ukraine could ease commodity pressures, but rumors of renewed Russian aggression loom over economic prospects.

Middle Eastern tensions have risen, with the US deterring broader conflict. A direct Iran-Israel war seems unlikely, favoring proxy battles. Regional neighbors may avoid direct conflict, but oil weaponization threats could destabilize markets, spike prices, and prompt inflation, challenging global economies.

Natural Gas Price Forecast

Natural Gas (NG) has encountered a dip in its price, currently trading at $3.515, a decline of 3.28%. The 4-hour chart reveals a pivotal juncture at $3.44, with resistances placed at $3.67, $3.80, and $3.95. Supports, on the other hand, stand firm at $3.28, $3.08, and $2.92.

The RSI, positioned at 54, implies a moderately bullish sentiment, signaling a potential for upward movement. The 50 EMA, currently at $3.42, is just below the price, indicating a short-term bullish trend.

Chart patterns show an upward trendline, corroborated by the 50 EMA, suggesting a continued bullish trend for NG. Given these factors, the overall trend leans bullish above the pivot point of $3.44. Short-term forecasts suggest Natural Gas may challenge the resistance at $3.67 in the upcoming sessions.

WTI Oil Price Forecast

WTI Crude Oil (WTI) has seen a notable increase in its 24-hour movement, currently priced at $82.60, marking a 1.72% rise. The 4-hour chart shows a pivot point at $85.13, suggesting a critical level for traders to watch. Immediate resistance is found at $88.21, with further ceilings at $91.29 and $94.37. Conversely, support levels are identified at $82.05, $78.97, and $75.81.

The 50-day EMA stands at $84.08, with prices below this average pointing to a short-term bearish trend. A downward channel pattern has been observed, exerting pressure on WTI, with the 50 EMA acting as resistance at $83.

The overall trend is bearish below $87.85, with the short-term forecast suggesting the asset may test these resistance levels in the coming days.

Brent Oil Price Forecast

In today’s commodities market, Brent oil shows a modest uptick, trading at $86.62, a 1.33% increase within the last 24 hours. On the 4-hour chart, pivotal price levels have been identified, with the current pivot point at $87.86. Immediate resistance and support levels are set at $89.53 and $85.02 respectively, outlining a narrow trading range for the short term.

Technical indicators suggest mixed sentiments: the RSI stands at 46, hinting at bearish sentiment, while the MACD’s value of -0.020 above its signal of -0.740 indicates potential upward momentum. The 50-day EMA at $87.84 serves as a crucial juncture; prices below this level suggest a bearish outlook.

A discernible downward channel pattern has been putting pressure on UK oil, with the 50 EMA acting as resistance. The overall trend leans bearish below $87.85, with short-term forecasts indicating a possible test of the resistance levels in the upcoming days.

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