Natural Gas, WTI Oil, Brent Oil Forecasts – Bears Focusing on Weak LNG Demand, Increasing Output

By:

James Hyerczyk

Published: Jun 26, 2024, 19:43 GMT+00:00

Key Points:

Natural gas futures are declining due to weak LNG demand and increasing production. The bearish trend continues, with oversupply concerns dominating trader sentiment.
WTI saw modest gains despite a surprise rise in U.S. gasoline supplies and a 3.6 million barrel crude stock increase, driven by Middle East supply concerns.
Brent performed better, boosted by Middle East tensions and Houthi attacks, with UBS analysts expecting price rises due to tightening global inventories.

Natural Gas

Daily Natural Gas

Natural gas futures are declining as the July contract nears expiration. The August contract also faces pressure due to weak LNG demand and increasing production. This bearish trend indicates a challenging market environment, with oversupply concerns dominating trader sentiment. Investors should watch for further price drops as the bearish outlook persists.

Natural gas futures are trading at $2.738, with resistance at $2.850 and support at $2.551. The RSI is at 51.63, indicating neutral momentum.

Prices are hovering above the 50-day moving average of $2.427, underpinning the uptrend. Traders should watch for a move above resistance for bullish signals or below support for bearish confirmation. A sustained move over $2.850 could attract momentum buyers, while a sharp break under $2.794 could trigger the start of a steep decline.

WTI Crude Oil

Daily USOIL (WTI)

West Texas Intermediate (WTI) crude experienced a modest gain on Wednesday despite a surprise increase in U.S. gasoline supplies. The U.S. Energy Information Administration reported a 3.6 million barrel rise in crude stocks, contrary to analysts’ expectations of a drawdown. However, concerns about potential Middle East supply disruptions, due to escalating tensions between Israel and Hezbollah, helped support prices. Analysts noted that while U.S. stockpiles are increasing, global inventories are tightening, suggesting mixed market signals.

WTI crude oil is trading at $80.74, with minor resistance at $81.60 and support at $80.03 and $79.18. The Relative Strength Index (RSI) at 57.21 suggests moderate buying interest.

The market is trading on the strong side of the 50-day moving average at $81.52, indicating potential strength. Traders should monitor for a breakout above resistance or a drop below support for directional signals. An upside breakout would target $83.53.

Brent Crude Oil

Daily Brent (UKOIL)

Brent crude performed better than WTI, bolstered by geopolitical risks in the Middle East. Cross-border tensions between Israel and Hezbollah, along with Houthi attacks on shipping in the Red Sea, have heightened fears of broader conflict involving major oil producer Iran. This geopolitical risk premium has driven Brent prices higher. Despite a jump in U.S. crude stocks, UBS analysts expect oil prices to rise in the coming weeks, supported by inventory draws in Japan and Europe, indicating a tightening global market.

Brent crude oil is trading at $84.31, with resistance at $85.01 and support at $83.57, the 50-day moving average. The Relative Strength Index (RSI) at 54.75 indicates moderate strength. Prices are fluctuating near the intermediate-term trend indicator, suggesting a potential consolidation phase. Traders should watch for a breakout above resistance or a dip below support for directional cues.

About the Author

James Hyerczykauthor

James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.