Oil and Natural Gas Market Analysis
Published: June 12, 2026
Key Points
- The US-Iran ceasefire has held for over ten weeks amidst ongoing tensions between Iran and Israel, leading to a gradual resumption of tanker traffic through the Strait of Hormuz.
- WTI crude oil prices have dropped to $86.12, breaking below key support levels.
- Brent crude oil has slipped to $88.48, showing neutral-to-bearish momentum.
- Natural gas futures are trading at $3.082, maintaining a steady structure within an ascending channel.
Market Overview
The oil markets are currently navigating through a crisis in the Persian Gulf, with significant reductions in Middle Eastern crude shipments. Oil production in the region has decreased by over 11 million barrels per day compared to prewar levels in May. This has resulted in steep drawdowns in total oil inventory, with OECD crude oil inventory levels approaching their lowest since 2003.
Despite ongoing ceasefire talks between the U.S. and Iran, crude oil prices remain volatile due to limited maritime traffic and ongoing strikes that highlight the fragility of any ceasefire agreement. Analysts suggest that non-OPEC+ supply increases, particularly from resilient U.S. oil production, along with a gradual resumption of oil exports from Persian Gulf producers, may help normalize supply conditions in the future.
Natural Gas Market Fundamentals
In contrast to oil, the natural gas market appears to have ample supply. U.S. natural gas production is near record highs, supported by higher associated gas volumes from the oil sector. The EIA has raised its natural gas production forecasts for 2026, indicating that storage builds have remained above average throughout the year. However, cooler weather forecasts may keep demand for natural gas in the power sector weak.
Technical Analysis
Natural Gas Futures
Natural gas is currently trading at $3.082. The price has retested the red 50-Period MA at $3.15 within a rising channel. The Relative Strength Index (RSI) is hovering around 50, indicating a neutral market. A trade idea suggests buying at $3.082 with a target of $3.153 and a stop at $3.028.
WTI Crude Oil
WTI crude oil is at $86.12, having broken below the blue channel floor at $88.99. The price action is bearish, with a target of $84.11-82.15 based on Fibonacci extensions. A trade idea suggests selling at $86.12 with a target of $84.11 and a stop at $87.50.
Brent Crude Oil
Brent crude oil is trading at $88.48, having been rejected at the 50 Period MA at $92.73. The price is neutral-to-bearish under the $89.89 pivot level, with a trade idea to sell at $88.48 targeting $87.53 and a stop at $90.00.
Conclusion
The oil and natural gas markets are currently influenced by geopolitical tensions and supply dynamics. While oil prices are under pressure due to reduced production and ongoing conflicts, natural gas fundamentals remain strong with ample supply expected to continue into the future.