Forex▼ Bearish
Oil Trades Flat as Hormuz Talks Drag; Natural Gas Rebounds
Oil traders are waiting for the results of negotiations between Iran and Oman.
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Natural gas prices bounced Friday after a volatile week, with traders shifting focus from a bearish government storage report to forecasts for hot weather that should keep demand elevated through mid-August.
The rebound came a day after the Energy Information Administration reported a 37-billion-cubic-foot injection into storage for the week ended July 26, a build that analysts at Gelber & Associates called "comfortably above" the five-year average of 29 Bcf. That report had pushed front-month futures to a session low near $2.56 per million British thermal units.
But weather models released Thursday evening showed a heat dome settling over the central U.S. through Aug. 14, with cooling demand running 15% above normal for this time of year, according to the National Weather Service.
"The storage number was a headwind, but the heat is real and it's not going away next week," a Houston-based natural gas trader said. "The market is pricing the weather forecast, not the storage surplus."
On the technical side, front-month futures need to clear the $2.70 level to challenge the $2.75-$2.80 resistance zone. A break above that would open a path toward $3.00-$3.05, a level not touched since late June. Support sits at $2.62, with a move below that exposing $2.50-$2.55, where buyers stepped in during the May selloff.
Oil markets stall on Hormuz uncertainty
Crude oil prices swung between gains and losses Friday as negotiations over the Strait of Hormuz continued without a breakthrough. West Texas Intermediate crude traded near $77.50 a barrel, while Brent crude held around $82.30, both little changed on the week.
Iran continued discussing the proposed deal with Oman, according to reports from state-run media. President Trump said talks remained ongoing but declined to provide a timeline, dashing expectations that an announcement would come this week.
"The market had priced in a deal getting done this week, and that hasn't happened," said John Kilduff, partner at Again Capital in New York. "Now traders are asking whether it gets done at all, or whether we're looking at weeks more of this limbo."