Natural Gas, WTI Oil, Brent Oil Forecasts – Bullish Oil Momentum, Gas Slips on Weak Storage Draw

WTI Crude Oil Outlook: Bullish Momentum Above Key Support

WTI crude oil futures closed the week with gains, consolidating above the critical 200-day moving average at $72.20. This level now serves as a strong technical floor, reinforcing upward momentum. The market has broken out of its previous consolidation zone between $71.10 and $68.69, with the next major target at $77.36​. Sustained trading above $72.20 signals the presence of new buyers, suggesting further price appreciation in the near term.

On the fundamental side, expectations of economic stimulus in China remain a primary catalyst. Beijing’s recent $20 billion injection into the economy through wage increases highlights efforts to support domestic consumption. As the world’s largest oil importer, China’s policies are closely monitored by traders, with additional measures expected to drive global oil demand in 2025​.

In the U.S., crude inventories fell by 1.2 million barrels, below forecasts of 2.8 million. Although the inventory miss limited some bullish enthusiasm, falling stocks indicate steady demand and refining activity. Traders are also focused on potential interest rate cuts by the Federal Reserve, which could stimulate economic growth and drive higher oil consumption​.

Brent Crude Oil Analysis: China and U.S. Demand in Focus

Brent crude oil followed a similar bullish trajectory, closing near $76.38, just shy of key resistance at $77.52. The technical outlook remains favorable, with the 50-day moving average at $73.01 providing additional support. A sustained break above $77.52 could open the door to further gains​.

China’s economic policies are a major driving force behind Brent’s upward trend. The wage hike and broader stimulus measures signal that demand from Asia’s largest economy is likely to rise, keeping Brent prices elevated. Analysts anticipate further fiscal and monetary support in China, which could reinforce the bullish trend into the first half of the year​.

Domestically, while U.S. crude stockpiles fell, refined product inventories such as gasoline and distillates saw increases, reflecting strong refinery activity. However, fuel demand in the U.S. dropped to a two-year low, presenting a mixed picture for traders. Any sign of increasing demand or further economic support could provide upside for Brent crude in the coming weeks​.

Natural Gas Market: Bearish Sentiment on Storage Surplus

Natural gas markets are under pressure following a smaller-than-expected draw from U.S. storage. The EIA reported a 116 Bcf withdrawal, missing forecasts of 127 Bcf. This tempered bullish sentiment and led to an 8.2% drop in natural gas prices to $3.36​.

Total storage stands at 3,413 Bcf, 154 Bcf above the five-year average. Despite higher-than-expected inventories, storage levels remain 67 Bcf below the same period last year. However, the shrinking year-over-year deficit signals mild weather and stable supply, reducing the urgency for aggressive withdrawals​.

Traders are monitoring weather forecasts closely, as any extended cold snap could shift market factors. Until such catalysts emerge, the surplus in storage is likely to maintain downward pressure on prices. The short-term outlook remains bearish unless heating demand increases significantly in the coming weeks​.

More Information in our Economic Calendar.