Natural Gas and Oil Forecast: Geopolitical Tensions and China’s Deflation Shape Market Sentiment

Market Overview

Oil prices dropped on Monday as China’s inflation rate declined, raising concerns about fuel demand in the world’s largest crude importer. Both Brent and WTI crude gave up gains from last week, with Brent losing over $1 before recovering slightly. Uncertainty over China’s economic stimulus package further dampened market sentiment.

Geopolitical tensions in the Middle East added pressure but were overshadowed by China’s economic concerns. This downturn in oil prices suggests potential volatility in natural gas markets as well, given the interconnected nature of energy markets and global demand factors.

Natural Gas Price Forecast

Natural Gas (NG) is trading at $2.84, down 0.28%, after testing key support levels. The 4-hour chart shows prices hovering near the pivot point at $2.62, which will be critical in determining the next move. Immediate resistance sits at $2.67, with further barriers at $2.72 and $2.77.

On the downside, support lies at $2.56, followed by $2.53 and $2.49. The 50-day and 200-day exponential moving averages (EMA) are both aligned at $2.68, suggesting strong price consolidation.

A bearish outlook is in play if prices stay below $2.62. However, a decisive break above this level could shift momentum to the upside, potentially driving more bullish action.

WTI Oil Price Forecast

USOIL is trading at $74.68, down 1.02%, showing weakness as it flirts with the pivot point at $74.79. The next key resistance lies at $76.20, followed by $77.40 and $78.44.

On the downside, immediate support can be found at $73.43, with further levels at $72.69 and $71.85. The 50-day EMA at $74.58 is keeping prices supported for now, while the 200-day EMA at $72.59 highlights the longer-term trend.

If oil remains above the pivot point of $74.79, the bullish momentum could continue. However, a break below this level would likely lead to a sharper decline as selling pressure increases. It’s a critical zone to watch.

Brent Oil Price Forecast

UKOIL is trading at $78.10, up 0.95%, and currently holding above its key pivot point at $78.10. The immediate resistance is seen at $79.47, followed by further resistance levels at $80.27 and $81.14. On the support side, the next levels to watch are $77.09, $76.35, and $75.35.

With the 50-day EMA sitting right at $78.05 and the 200-day EMA at $76.07, prices are consolidating near a crucial level. As long as UK oil remains above $78.10, the bullish trend remains intact.

However, a drop below this pivot point could signal increased selling pressure, potentially driving prices lower. For now, it’s all about watching how it holds above $78.10.