Natural Gas, WTI and Brent Oil Forecasts as Oil Prices Move Lower on Ceasefire Extension Talks

Natural gas prices are attempting to rebound as traders take some profits after a recent pullback and look ahead to tomorrow’s EIA report. Oil prices, meanwhile, are mixed as attention turns to potential developments in the Middle East.

Natural gas targets a return above $2.60 ahead of the EIA

Natural gas is trying to settle back above the $2.60 area. The report is expected to show working gas in storage increased by +55 Bcf, compared with a +50 Bcf rise in the prior week.

If natural gas settles back above $2.65, it would likely move toward the nearest resistance in the $2.75 – $2.80 range. A break above $2.80 could push prices toward the 50-day moving average at $2.94.

On the downside, the nearest support is seen at $2.50 – $2.55. A move below $2.50 would put the next support area at $2.20 – $2.25 in focus.

WTI retreats as traders weigh the EIA and possible ceasefire extension

WTI oil is losing ground as traders react to the EIA data and focus on developments involving the United States and Iran.

The EIA report showed crude inventories fell by -0.9 million barrels versus an analyst forecast for a +0.2 million barrel increase. At current levels, crude inventories are about 1% above the five-year average for this time of year.

Motor gasoline inventories declined by -6.3 million barrels, compared with expectations for a drop of -2.1 million barrels. Distillate fuel inventories decreased by -3.1 million barrels from the previous week.

U.S. crude oil imports fell by -1.0 million bpd, averaging 5.3 million bpd. Over the past four weeks, crude oil imports averaged about 6.1 million bpd.

The Strategic Petroleum Reserve decreased from 413.3 million barrels to 409.2 million barrels as the U.S. sold oil to cool prices. Domestic oil production remained unchanged at 13.569 million bpd.

Middle East developments in focus

Recent reports indicate that the U.S. and Iran are discussing a possible extension of the current ceasefire regime to allow more time for negotiations, with the truce potentially extended by two weeks. The Pakistan Army Chief has reportedly landed in Tehran to serve as a mediator for talks between the U.S. and Iran, with Pakistan continuing to play a role in negotiations.

WTI technical levels

Technically, WTI continues attempts to settle below support at $91.00 – $91.50. If WTI settles below $91.00, it would move toward support at $84.00 – $85.00. The RSI is described as in moderate territory, suggesting room for momentum if catalysts emerge.

On the upside, a move above $91.50 would open the way to test resistance at $97.00 – $97.50.

Brent trades choppily, supported by the Strait of Hormuz

Brent oil is swinging between gains and losses as the market stabilizes after recent volatility. The Strait of Hormuz remains closed, which is described as supportive for oil markets. At the same time, futures traders are focused on the potential second round of U.S.-Iran negotiations, which could add pressure on prices.

Brent technical levels

If Brent settles below $95.00, it would move toward support at $91.00 – $91.50. A drop below $91.00 would shift attention to the 50-day moving average at $88.55.

Resistance is located in the $97.00 – $97.50 range. A successful test of that area could push Brent toward resistance at $103.00 – $103.50.