Natural Gas and Oil Forecast: $98 Breakout in Sight – Is $103 Next for WTI?

Key Points

• The shutdown of the Strait of Hormuz has triggered significant supply fears, pushing WTI crude prices toward $97.
• A release of 400 million barrels from the Strategic Petroleum Reserve (SPR) has failed to stabilize prices amid ongoing geopolitical tensions.
• WTI crude is consolidating around $96, with a critical resistance level between $98 and $100 that could lead to a price target of $103.

Market Overview

The crude oil and natural gas markets have seen an uptick this week due to escalating tensions in the Middle East, particularly with the ongoing air strikes and the closure of the Strait of Hormuz. This situation has raised concerns about global supply tightness, leading WTI futures to reach $97 a barrel, marking a notable 5% gain for the week despite a slight pullback from earlier highs.

Efforts to mitigate the situation, such as the release of emergency stockpiles, have had limited success in calming the markets. The geopolitical strikes continue to disrupt production and shipping, exacerbating fears of supply shortages.

Natural Gas Price Forecast

Natural gas prices are currently trading around $3.29, having rebounded from a support level of $3.00. The price has reclaimed both the 50- and 200-period moving averages, indicating a potential bullish momentum. The RSI is near 60, suggesting steady buying pressure without extreme conditions. Resistance levels are identified at $3.37 and $3.49, with a confirmed breakout potentially leading to gains towards $3.60. Conversely, failure to hold above $3.16 could weaken momentum, leading to a retest of the demand zone between $3.07 and $2.95.

WTI Crude Oil Forecast

WTI crude oil has stabilized around $96 after a sharp pullback from the $110 Fibonacci level. The price is currently consolidating between the 0.382 retracement level at $92.98 and the psychological resistance area between $98 and $100. The 50-period moving average is flat, while the 200-period MA is trending upwards, indicating a broader bullish structure. The RSI is around 60, suggesting moderate bullish momentum. A sustained break above $98 could lead to a target of $103, while a failure to hold above $92.90 may shift focus back to support levels at $86.70 and $81.50.

Brent Oil Price Outlook

Brent crude is trading near $101 after rebounding from the $87-$90 support zone. As long as prices remain above the rising 200-period MA, the broader uptrend is expected to continue. However, resistance at $105.70 is currently limiting upward movement. The 50-period moving average is acting as dynamic support near $98.70, reinforcing a bullish bias. If Brent can break above $105.70, it may retest the $112.90 highs; however, a drop below $98 could lead to a retest of $93.50.