Forex▲ Bullish
Natural Gas and Oil Forecast: Hormuz Risks Keep WTI and Brent Supported
Hormuz risks keep oil supported as Iraq plans alternative exports. WTI holds above $83.79, Brent above $90.17. Natural gas tests $2.78 resistance.
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Uncertainty over the Strait of Hormuz again dominated crude and gas markets, with the U.S. and Iran still giving conflicting pictures of access. President Trump has said there are no ongoing negotiations with Iran and that Hormuz is open. Iran has held that restrictions remain. The ceasefire expired August 17, and there is now no clear diplomatic path to restarting Gulf exports.
Iraq has developed plans for alternative export routes beginning in September. Two large Chinese shipping companies are not sending tankers to Hormuz or Bab al-Mandeb, instead loading cargoes outside the Gulf. The EIA estimated the Middle East disruptions accounted for 5.5 million barrels per day of shut-in production in July, with about 600,000 barrels per day expected to remain offline for the rest of 2020.
U.S. inventories have eased. EIA data showed total commercial crude inventories fell by about 600,000 barrels in the week ending August 14.
Natural gas fundamentals in the U.S. are better than in other regions. Production in the Lower 48 averaged around 108.5 Bcf/d in August, up from July's record. Inventories are well above normal. Demand from LNG feedgas is recovering from maintenance, but supply still exceeds need.
Natural gas rallied to $2.78 after bouncing from the $2.62–$2.67 support zone. The price moved above the 50-period EMA at $2.74 and is testing the 100-EMA at $2.77 and a descending trendline that has capped recent rallies. The $2.78–$2.80 area is a key technical decision point, Arslan said.
RSI is near 61 and improving but not overbought. Immediate resistance is at $2.80, with $2.86, $2.92 and $2.98 above. Support sits at $2.73, $2.67 and $2.62.