Natural Gas and Oil Forecast: Prices Plunge as OPEC+ Cuts, More Selling Ahead

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Updated: Jun 4, 2024, 10:28 GMT+00:00

Key Points:

Oil prices hit a four-month low as OPEC+ signals reduced production cuts.
Weak U.S. manufacturing data and mixed China PMI readings heighten demand fears.
Declining oil prices impact energy markets, including natural gas and investor dynamics.

Market Overview

Oil prices dropped to a four-month low due to OPEC+ signaling it will reduce production cuts, alongside weak economic data raising demand concerns. OPEC+ plans to scale back 2.2 million barrels per day from September 2024 to October 2025, signaling a bearish market outlook if demand does not meet expectations.

Weak U.S. manufacturing data and mixed PMI readings from China further exacerbated demand fears.

This decline in oil prices is expected to impact the broader energy market, including natural gas, as investors reassess supply and demand dynamics in the face of economic uncertainty and potential geopolitical stability in the Middle East.

Natural Gas Price Forecast

Natural Gas (NG) Price Chart

Natural Gas (NG) is currently priced at $2.76, showing a decline of 0.40%. On the 4-hour chart, the pivot point is set at $2.71, marking a critical level for traders. Immediate resistance is observed at $2.80, with subsequent resistance levels at $2.86 and $2.92.

On the downside, immediate support lies at $2.64, followed by $2.57 and $2.50. The 50-day Exponential Moving Average (EMA) is positioned at $2.36. The overall outlook remains bullish above $2.71, but a break below this pivot could trigger a sharp selling trend.

WTI Oil Price Forecast

WTI Price Chart

USOIL is trading at $77.12, down 0.89%. On the 4-hour chart, the pivot point is at $77.49. Immediate resistance is at $78.58, followed by $79.36 and $80.59. Immediate support is noted at $76.16, with further support at $75.11 and $74.31.

The 50-day Exponential Moving Average (EMA) is $78.43. whereas the 200-day EMA stands at $79.58, indicating overbought conditions. The outlook is bearish below $77.50. A break above this level could shift the bias to bullish, while staying below it may intensify the downward trend.

Brent Oil Price Forecast

Brent Price Chart

UKOIL is trading at $77.74, down 0.65%. On the 4-hour chart, the pivot point is at $78.13. Immediate resistance levels are at $79.54, $80.64, and $81.51. Immediate support is found at $76.58, followed by $75.52 and $74.15.

The 50-day Exponential Moving Average (EMA) is $81.69 and the 200-day EMA holds around $83.62, and both of these are signaling a solid selling trend.

The outlook remains bearish below $78.13. A break above this level could shift the bias to bullish, while remaining below it may strengthen the downward trend.

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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.