Natural Gas and Oil Forecast: Energy Prices Dips; Can NG Bounce-off Above $2.20?

By:

Arslan Ali

Updated: May 13, 2024, 09:58 GMT+00:00

Key Points:

Oil prices decline due to weak demand and Fed's reluctance to cut interest rates.
U.S. dollar strength, bolstered by steady Fed rates, makes oil more expensive globally.
Natural gas prices slightly increase, indicating cautious optimism in the market.

In this article:

Natural Gas

-1.80%

WTI Oil

-1.51%

Brent Oil

-1.75%

Market Overview

Oil prices dropped this week, reflecting weak fuel demand and comments from U.S. Federal Reserve officials that reduced hopes for imminent interest rate cuts. The U.S. economic indicators suggest a slowdown, with both oil benchmarks dropping about $1 on concerns over high U.S. interest rates and maintaining inflation control, counteracting any bullish sentiment from geopolitical tensions in the Middle East.

Despite potential support from OPEC+ extending supply cuts, the robust U.S. dollar—strengthened by expectations that the Federal Reserve will maintain current interest rates—makes dollar-denominated oil more costly for holders of other currencies.

Natural Gas Price Forecast

Natural Gas (NG) Price Chart

Today’s technical outlook for Natural Gas (NG) reflects a price increase to $2.33, up 0.91%. The market is currently hovering around a pivotal level of $2.21, with the next resistance levels identified at $2.35, $2.39, and $2.43.

These are key thresholds that need to be overcome to sustain upward momentum. Conversely, support levels are established at $2.28, followed closely by $2.24 and $2.20, which could cushion any pullbacks.

The 50-day Exponential Moving Average, currently at $2.20, aligns closely with the lower support, reinforcing its significance. Today’s market stance is cautiously bullish above $2.21, but a drop below this pivot could trigger a sharp sell-off.

WTI Oil Price Forecast

WTI Price Chart

USOIL exhibits a slight uptick, currently priced at $79.79, marking a 0.30% increase. The commodity has established a pivot point at $78.92, serving as a key juncture for future price movements. Looking ahead, USOIL faces immediate resistance at $80.71, with further hurdles at $81.53 and $82.30.

Should the price fall, support levels to watch include $77.91, followed by $77.18 and $76.16. The 50-day Exponential Moving Average currently sits at $79.09, indicating a potential resistance zone.

Overall, market sentiment will tilt bullish if prices ascend past $78.92, whereas a drop below this level may reinforce bearish trends.

Brent Oil Price Forecast

Brent Price Chart

Today’s analysis of UKOIL shows a modest price rise to $84.36, a 0.27% increase. The current session pinpoints $84.09 as the pivot point, central to potential shifts in market dynamics. Resistance levels are observed at $84.80, $85.57, and $86.54, which UKOIL must surpass to confirm a bullish trend.

Conversely, support levels are identified at $83.39, $82.79, and $82.04, which could play a critical role if downward pressure resumes. The 50-day Exponential Moving Average stands at $83.74, suggesting slight resistance near this area.

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

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.

Did you find this article useful?