Global energy markets faced renewed uncertainty this week as U.S. crude oil inventories unexpectedly rose by 1.3 million barrels, pushing total stockpiles to 443.2 million. This surprise build contradicted analyst forecasts of a drawdown, amplifying concerns over waning demand. Weaker consumption of gasoline and distillates, combined with a six-week high in oil imports, added to the bearish tone.
Despite the data, oil prices remained relatively steady on Thursday, though the broader market sentiment was cautious. West Texas Intermediate (WTI) and Brent oil both dipped by around 0.7% midweek, reflecting trader indecision. Meanwhile, global geopolitical developments, particularly renewed nuclear negotiations are injecting additional volatility into energy markets.
While some analysts remain hopeful that summer demand will buoy prices in the coming weeks, the current environment remains fragile. Supply risks, including sanctions on key oil producers and potential geopolitical disruptions, continue to weigh on the outlook.
Natural Gas Prices Slip Below Key Levels, Hinting at Weak Momentum
Natural gas futures are currently trading near $3.35, showing signs of fading momentum as prices hover below both the 50-day ($3.353) and 200-day ($3.452) exponential moving averages (EMA), which now act as dynamic resistance points. After peaking at $3.72, the price retraced to find support around the 38.2% Fibonacci level ($3.338), a zone now serving as the immediate pivot.
Market structure shows a series of lower highs forming since mid-May, signaling a potential downtrend as buyers struggle to gain control. Unless bulls can reclaim the $3.41 level, a key 50% Fibonacci retracement with strong volume, prices risk retreating toward $3.25 or even $3.16.
Overall, natural gas appears to be in a sideways-to-bearish phase. The lack of bullish follow-through and the inability to breach major resistance levels have traders wary, with price action suggesting any upside could be limited without a decisive breakout.
WTI and Brent Crude Oil Trade Narrow Ranges, Eyes on Key Resistance
WTI U.S. crude oil is holding near a crucial support zone at $61.12, where a rising trendline intersects with a horizontal pivot level. Prices are compressed between the 50-day EMA at $61.89 and the 200-day EMA just below at $61.45, signaling indecision. While higher lows since May 1 hint at a mildly bullish trend, recent candlestick formations featuring small bodies and long wicks suggest hesitation in the market.
Traders are watching $62.67 as the next key resistance; a breakout above this level could revive short-term bullish momentum. Failure to do so, however, risks a pullback toward $60.06 or $59.31.
Brent U.S. crude oil is exhibiting similar behavior, currently trading around $64.71. The commodity is clinging to support formed by a trendline from early May and the 200-day EMA at $64.65. Resistance remains capped by the 50-day EMA at $65.18, and price action shows indecision, with a spinning top candlestick indicating a potential inflection point.
A breakout above $65.65 could trigger a bullish reversal targeting $66.60 and $67.48. Conversely, a fall below $64.46 might lead to a retreat toward $63.40 or $62.47. Traders are closely monitoring this tight consolidation zone for the next decisive move.
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