Oil and Natural Gas Market Analysis

Author: Arslan Ali

Published: August 3, 2026

Key Points

• Middle East shipping disruptions continue to limit Gulf energy exports despite some improvements in the Strait of Hormuz.
• Global oil inventories remain tight as strategic reserves and commercial stockpiles absorb earlier supply disruptions.
• WTI crude oil remains below major resistance levels, vulnerable unless buyers reclaim the $83.30 mark.
• Brent crude is trading below key moving averages, with rallies likely facing resistance until $85.68 is recovered.
• Natural gas prices are range-bound, with traders watching for a breakout above Fibonacci resistance near the $2.80 area.

Market Overview

The crude oil market is currently influenced by the incomplete recovery of flows through the Strait of Hormuz. Despite some diplomatic progress, tanker traffic and production in the Gulf remain below pre-conflict levels. This situation has led to a significant constraint on global oil supply, as confirmed by reports from the International Energy Agency (IEA) and various market analysts.

Global inventories have been sustaining the available supply, with strategic petroleum reserves in major consuming countries being drawn down. Demand has shown some elasticity, particularly in Asia, where lower imports and reduced fuel demand have helped balance the market. Non-OPEC supply and increased exports from the Atlantic Basin have mitigated the impact of OPEC+ production increases.

Natural Gas Market Analysis

Natural gas markets are facing similar challenges, with limited LNG exports from Qatar and the UAE due to transit constraints through the Strait. The IEA projects that global LNG supply will stabilize by 2026, thanks to increased production from North America, Africa, and Australia, which will offset losses from Gulf Cooperation Countries. Demand in Asia has decreased due to a shift to coal and cuts in industrial production, while Europe is experiencing competition for seasonal storage, slowing LNG supply.

Technical Analysis

Natural Gas

Natural gas prices are consolidating around the $2.75 level, supported by the 23.6% Fibonacci retracement level. The price remains below the 50-EMA ($2.753) and 100-EMA ($2.765), indicating a lack of significant movement. Immediate resistance is at $2.805, with support at $2.752 and stronger support at $2.666.

WTI Crude Oil

WTI crude has shown a slight recovery after approaching the $78.30 support level, but overall technical indicators remain bearish. The price is trading below the 50-EMA ($82.65) and 100-EMA ($83.23), with the old support area around $83.30 now acting as major resistance. The primary support is at $78.27, with resistance at $80.60 and $83.31.

Brent Crude Oil

Brent crude is also experiencing a weak recovery after hitting the $80.60 support level. Prices remain below the 50-EMA ($86.15) and 100-EMA ($86.93), with bearish sentiment expected despite recent bounces. The first support level is at $83.80, with resistance at $85.68, $88.80, and $91.33.

Conclusion

The outlook for both oil and natural gas markets remains cautious, heavily dependent on the normalization of transit in the Middle East and demand responses from major importing countries. The current technical indicators suggest a bearish sentiment prevailing in both WTI and Brent crude oil markets, while natural gas prices are consolidating with potential for a breakout.