Oil prices fell for the fifth consecutive session on Thursday due to global demand concerns, despite a drop in U.S. fuel inventories. Since August 15, the front-month WTI contract for October has declined by 6.9%, while Brent futures have fallen by 6.4%.
Weak economic data from the U.S. and China, coupled with fears that OPEC+ may reverse output cuts in October, have contributed to this downturn.
Although U.S. inventories have decreased, the potential for increased OPEC+ supply and ongoing geopolitical uncertainties are likely to keep oil prices under pressure, impacting both oil and natural gas forecasts.
Natural Gas (NG) is currently finding support near $2.15, with an upward trendline offering additional strength. The immediate resistance sits at $2.21, which acts as a key pivot point. A break above this level could trigger a bullish trend, potentially pushing prices toward the next resistance levels at $2.29, $2.35, and $2.41.
On the downside, support levels are at $2.11, $2.05, and $1.99, with the 50-day Exponential Moving Average (EMA) at $2.18 and the 200-day EMA at $2.21. These levels will play a crucial role in determining the market’s direction.
Conclusion: Bearish below $2.21; a break above this level could signal a bullish trend.
On the 4-hour chart, WTI Crude Oil (USOIL) is showing signs of support near the $71.40 level, where a double bottom pattern is forming. This pattern typically signals a potential reversal in trend, especially if candles close above this key level. Immediate resistance is at $72.91, with further resistance at $74.37 and $75.73. On the downside, key support levels to watch are $70.16, $68.94, and $67.74.
The 50-day Exponential Moving Average (EMA) at $74.87 suggests a bearish trend, but a close above $71.41 could shift momentum towards a bullish reversal.
Conclusion: Bullish above $71.41; a break below this level could lead to sharp selling.
Brent Oil (UKOIL) continues to face pressure from a downward channel, with immediate resistance at $76.50. This level acts as a pivot, and if prices remain below it, the bearish trend is likely to persist. Resistance levels to watch are $78.19, $79.33, and $80.91. On the downside, immediate support sits at $75.00, with further levels at $73.86 and $72.82.
The 50-day Exponential Moving Average (EMA) at $78.50 and the 200-day EMA at $80.53 both suggest a bearish outlook unless Brent breaks above $76.50, which could spark a shift towards a bullish trend.
Conclusion: Bearish below $76.50; a break above could signal a bullish reversal.
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.