Natural Gas and Oil Forecast: Hormuz Standstill – Can Brent Bulls Hit $89.57 Next?

Key Points

• WTI crude oil has cleared the $78.19 resistance zone, targeting $82.23 and $84.91.
• Brent crude remains above its $84.49 support, with indicators suggesting a breakout towards $87.42.
• Shipping through the Strait of Hormuz is nearly halted, impacting a critical oil supply route.

Market Overview

WTI crude oil futures rebounded to around $80 per barrel, marking the largest weekly increase in over two years. This recovery followed a brief decline of up to 3% due to U.S. measures aimed at controlling rising energy prices, including potential tapping of strategic reserves and adjustments to fuel blending rules.

Despite earlier losses, crude oil ended the week with a 20% gain, driven by ongoing conflicts in the Middle East that have severely disrupted energy markets. The situation escalated with Iran's missile and drone attacks across the Gulf, including strikes on an oil refinery in Bahrain, while Israel continued airstrikes in Tehran.

Natural Gas Analysis

Natural gas futures are precariously positioned at $2.97, just above the critical $2.91 support level, which coincides with the 200-EMA and a trendline. The 50-EMA is flat at $2.99, indicating a lack of momentum. If prices fall below $2.91, potential support levels to watch are $2.84 and $2.77. The RSI is at 50, suggesting that momentum has stalled, but a recovery to $3.03 and $3.10 remains possible if the trendline holds.

WTI Crude Oil Analysis

WTI is currently trading around $81.35 after breaking above the $78.19 resistance level. The upward trend structure remains intact, supported by higher highs and higher lows. The first support level is at $78.19, followed by $75.16. If WTI surpasses $82.23, it could aim for $84.91; however, a drop below $78.19 would indicate a need for consolidation.

Brent Crude Oil Analysis

Brent crude is hovering around $85.79, maintaining its position above the upward trendline. It has cleared the $84.49 resistance and is making higher lows, indicating bullish sentiment. The 50-day EMA is trending upwards at $82.00, while the 200-day EMA near $74.00 supports a positive outlook. Key support levels are at $84.49 and $82.00. A sustained move above $87.42 could lead to a target of $89.57, but a break below the trendline would suggest consolidation around $82.00.