Natural Gas and Oil Forecast: Energy Slips 0.25%, Inventory Build Raises Concerns

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Updated: May 22, 2024, 10:36 GMT+00:00

Key Points:

Oil prices dropped due to an unexpected U.S. inventory build and high interest rates.
The American Petroleum Institute reported a 2.5 million barrel increase in U.S. oil inventories.
The bearish outlook for oil and natural gas suggests potential downward pressure on prices.

Natural Gas and Oil Forecast: Energy Slips 0.25%, Inventory Build Raises Concerns

Market Overview

Oil prices dropped on Wednesday due to an unexpected build in U.S. inventories and concerns over high U.S. interest rates. This marks the fourth consecutive session of decline, fueled by fears of weak demand and reduced geopolitical tensions in the Middle East. Additionally, optimism about China’s economic recovery has cooled.

The American Petroleum Institute reported a 2.5 million barrel increase in U.S. oil inventories for the week ending May 17, contrary to expectations. This unexpected build raised concerns about sluggish oil demand. Traders are wary that persistent inflation and high interest rates will curb demand, despite the upcoming travel-heavy summer season.

Impact on Natural Gas and Oil Forecast: The unexpected inventory build and high interest rates suggest a bearish outlook for both oil and natural gas, indicating potential downward pressure on prices in the near term.

Natural Gas Price Forecast

Natural Gas (NG) Price Chart

Natural Gas (NG) prices are down 1.29%, currently at $2.76. On the 4-hour chart, the pivot point stands at $2.64. Immediate resistance levels are at $2.70, $2.80, and $2.89. Support levels are seen at $2.55, $2.48, and $2.39.

The 50-day EMA is at $2.50, while the 200-day EMA is at $2.15. The market remains bearish below $2.64, with potential bullish momentum if prices break above this level.

WTI Oil Price Forecast

WTI Price Chart

Crude oil (USOIL) is trading at $77.96, down 0.25%. On the 4-hour chart, the pivot point is $78.33. Key resistance levels are $79.03, $80.08, and $80.88, while support levels are at $77.63, $76.69, and $75.76.

The 50-day EMA is at $78.90, and the 200-day EMA is at $80.35. The market outlook remains bearish below $78.33, with potential for bullish momentum if prices break above this level. Current indicators suggest downward pressure, but a decisive move above $78.33 could signal a shift in trend.

Brent Oil Price Forecast

Brent Price Chart

Brent crude (UKOIL) is trading at $82.20, down 0.34%. On the 4-hour chart, the pivot point is $82.57. Key resistance levels are $83.49, $84.51, and $85.57, while support levels are at $81.04, $80.14, and $79.31. The 50-day EMA stands at $83.30, with the 200-day EMA at $84.85.

The market outlook remains bearish below $82.57, indicating a potential for further decline unless prices break above this level. Current indicators suggest a downward trend, but a move above $82.57 could signal a reversal and introduce bullish 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.