Natural Gas, WTI Oil, Brent Oil Forecasts – Crude Having Buy Rumor, Sell Fact Moment

By:

James Hyerczyk

Updated: Mar 4, 2024, 18:46 GMT+00:00

Key Points:

Natural Gas: Surge on oversold conditions; EQT cuts output amid low prices.
WTI Oil: Prices drop as OPEC+ extends cuts, market stability targeted.
Brent Oil: Faces decline after OPEC+ maintains cuts, market stability in focus.

Natural Gas

Daily Natural Gas

On Monday, U.S. natural gas futures experienced a substantial increase, fueled by traders taking advantage of oversold technical situations and evaluating the potential for production reductions. In response to consistently low commodity prices, EQT, the top natural gas producer in the U.S., declared its intention to reduce production by nearly 1 billion cubic feet per day (bcfpd) until March.

The daily chart clearly identifies the 50-day moving average at $2.081 as the key target.

WTI Oil

WTI crude oil prices declined on Monday following OPEC+’s decision to extend voluntary output cuts into the second quarter, aiming to stabilize short-term crude markets. OPEC+ will maintain the 2.2 million barrels per day reduction, with Saudi Arabia continuing its 1 million barrels per day cut, keeping its production around 9 million barrels per day.

Despite this, energy strategist Walt Chancellor suggests the market had anticipated the extension, thus limiting its impact. Russia, another major player in OPEC+, will also cut its production and export supplies. The decision reflects OPEC+’s commitment to maintaining oil prices above $80 per barrel, amid concerns over weaker than expected demand in the upcoming quarter. This comes despite factors like OPEC+ supply cuts and geopolitical tensions that have kept oil prices within a narrow $75 to $85 range since the year’s start.

Technically, today is the first lower day in five and only the fourth in a month so bullish traders aren’t too worried about the setback. Holding above the 200-day moving average or long-term trend indicator at $76.66 is helping to put bullish traders at ease.

Brent Oil

Daily Brent Crude OIl

Brent crude oil witnessed a significant drop in prices following OPEC+’s announcement to maintain their current production cuts into the next quarter. This decision comes as a strategic move to bolster the market’s stability amid fluctuating global demand. The extension includes the ongoing reduction of 2.2 million barrels per day, a measure initially set for the first quarter of the year.

Analysts, such as Walt Chancellor from Macquarie, believe that the market had already factored in this extension, hence the limited impact on prices. Key OPEC+ members, including Saudi Arabia, Russia, Iraq, and the UAE, have reaffirmed their commitment to these production cuts. Saudi Arabia, in particular, will continue its additional voluntary cut of 1 million barrels per day, aiming to stabilize its output at around 9 million barrels per day.

This concerted effort by OPEC+ members underlines their determination to keep oil prices above a certain threshold, despite the ongoing challenges such as geopolitical risks and uneven global recovery from the pandemic. The Brent crude market remains cautious, reflecting concerns over potentially subdued demand in the coming quarter.

Technically, the key to sustaining the rally by Brent crude oil, is holding the 200-day moving average at $82.11. If this level fails then the long-term trend will turn down with the next target the 50-day moving average at $80.17.

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.