Natural Gas and Oil Analysis: WTI Stability Amid Global Dynamics

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Published: Jan 1, 2024, 12:49 GMT+00:00

US crude oil inventories saw mixed reports, with the American Petroleum Institute noting an increase, while the Energy Information Administration reported a larger-than-expected drop.

Natural Gas and Oil Analysis: WTI Stability Amid Global Dynamics

WTI trading around $72.15, influenced by US Dollar’s rebound and easing supply disruption concerns.
Red Sea tensions diminish, resuming major shipping operations; impacts oil logistics.
Mixed US crude oil inventory reports: API notes an increase, EIA reports larger-than-expected drop.
Possible interest rate cuts in Europe and US in 2024 could affect WTI and other USD-denominated commodities.
Natural Gas starts at $2.47, with RSI at 50 and MACD suggesting a slightly bearish momentum.

Quick Fundamental Outlook

The US crude oil benchmark, Western Texas Intermediate (WTI), is trading at approximately $72.15, influenced by the US Dollar’s modest rebound and reduced concerns over supply disruptions. Tensions in the Red Sea, affecting major shipping routes, have eased, allowing logistical operations to resume.

US crude oil inventories saw mixed reports, with the American Petroleum Institute (API) noting an increase, while the Energy Information Administration (EIA) reported a larger-than-expected drop. The possibility of interest rate cuts in Europe and the US in 2024 could impact USD-denominated commodities like WTI.

This scenario and the upcoming Chicago PMI data release are expected to influence WTI prices, which could subsequently affect USOIL, UKOIL, and Natural Gas prices due to their interconnected nature in global energy markets.

Natural Gas Price Forecast

Natural Gas Chart

Natural Gas (NG) starts the year at $2.47, experiencing a downturn of 1.81%. The analysis, based on a detailed chart with a focus on key price levels, indicates a pivot point at $2.46. Resistance levels are identified at $2.57, $2.66, and $2.8047, while support levels are found at $2.39, $2.30, and $2.20, offering insights into potential market movements.

The Relative Strength Index (RSI) for NG stands at 50, precisely at the threshold between bullish and bearish sentiments. The Moving Average Convergence Divergence (MACD) presents a nuanced picture with a value of -0.001 and a signal line at 0.017, suggesting a balanced yet slightly bearish momentum.

Notably, NG is trading just above its 50-Day Exponential Moving Average (EMA) of $2.46, which could act as a pivotal point for future price direction. In conclusion, NG presents a cautiously optimistic outlook, being bullish above the critical $2.46 level.

WTI Oil Price Forecast

WTI Price Chart

USOIL currently stands at $71.29, marking a downward shift of 0.79% in the last 24 hours. This movement is captured on a 4-hour chart timeframe, offering a granular view of the market’s behavior. The pivotal price point for USOIL is now set at $72.38.

Key resistances loom at $73.69, $76.11, and $77.67, while supports are firmly established at $70.92, $69.07, and $67.70, providing clear markers for potential price movements.

From a technical standpoint, the Relative Strength Index (RSI) sits at 31, suggesting a bearish sentiment as it hovers near the oversold territory. This is further corroborated by the Moving Average Convergence Divergence (MACD), which currently reads -0.270 against a signal line of -0.620, indicating a potential downward momentum.

Notably, USOIL is trading at the 50-Day Exponential Moving Average (EMA) of $70.92, reinforcing the short-term bearish outlook. The chart patterns reveal a bearish engulfing candlestick formation below $72.40, hinting at a continuation of the downtrend. This bearish pattern, coupled with the technical indicators, suggests a cautious approach for traders and investors.

In conclusion, the overall trend for USOIL appears bearish, particularly if prices remain below the $70.95 mark.

Brent Oil Price Forecast

UKOIL Price Chart

UKOIL opens the new year at $77.04, marking a slight decline of 0.47%. This movement is captured in a detailed 4-hour chart timeframe, highlighting pivotal price dynamics. The key pivot point is set at $77.91, with resistance levels at $79.24, $81.51, and $83.06, and support levels at $75.75, $74.40, and $72.45.

The technical indicators paint a bearish picture: the Relative Strength Index (RSI) is at 33, nearing the oversold territory, suggesting a bearish sentiment. The Moving Average Convergence Divergence (MACD) stands at -0.26, lagging behind its signal line at -0.56, further indicating a potential downward trend. Notably, UKOIL is trading below its 50-Day Exponential Moving Average (EMA) of $78.57, confirming the short-term bearish trend.

Overall, the indicators and chart patterns suggest a bearish outlook for UKOIL, especially if it remains below the $78.57 mark. Investors and traders should monitor these levels closely for any changes in momentum.

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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.